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Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes
Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes
Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Positioning theory has been developed for 50 years, and its influence is undoubted, but it is also becoming more and more divergent in the new era. Some people think of it as nothing more than a gorgeous coat for marketing packaging, while others see it as a sword that strikes consumers directly.

It is undeniable that in this era of information explosion and consumer distraction, the essence of brand positioning is gradually being diluted. When the Internet celebrity brand exploded overnight, it seemed that the clear positioning was the fast channel to the traffic temple, but when the craze subsided, everyone put the positioning on the altar again.

We can't help but wonder: in this era, is the brand positioning a "fast-moving consumer goods", or does there still exist a deeper survival philosophy and strategic significance?

In order to find out, we had an in-depth conversation with Wu Zhiwei, the founder of Plank Road Capital.

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Wu Zhiwei, founder of Plank Road Capital

Starting as a sales management trainee at Wrigley, to becoming the No. 1 employee of Trout's investment company, and then to founding Plank Road Capital, he has adhered to the consumer industry for 17 years, witnessed the rise and fall of countless brands, and is also an explorer and practitioner of firm brand positioning in investing and helping enterprises operate.

Plank Road Capital has been able to invest in a number of outstanding companies such as Quzhi Group (00917.HK), Reliable Shares (301009.SZ), Shuanggun Technology (001211.SZ), Fubei, Weishi, Lao Niang, etc., and has remained calm in the investment boom of Internet celebrity brands in the past few years, and has hardly stepped on the pit, which is largely the application of dialectical innovation in positioning theory.

In Wu Zhiwei's eyes, brand positioning is a science deeply rooted in human nature and sociology, which is deeply rooted in human DNA and has evolved over millions of years. As a result, in the past half century, whether in the birthplace of the United States or in China, an emerging market, positioning theory has shown strong vitality and application scalability.

"Brand positioning is a powerful lever, but it's not a panacea." He also soberly pointed out the common misunderstanding of positioning in reality: blindly following or ignoring the in-depth analysis of the essence of the category.

It seems to be a simple positioning, but in fact the threshold is extremely high, because if everyone can, it is more difficult to make different results, and the same is true for consumer entrepreneurship and consumer investment.

"My sword, leave it to those who can wield it." It is a message from everyone to remember Munger, and it is also like a declaration of positioning theory to respond to doubts.

It is hoped that through this in-depth dialogue, everyone can find the true background color of brand positioning in the noise of the market, and realize the continuous amplification of brand and personal value.

Conversation | Wu Zhiwei

Edit | Ichi-cho

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Inspur New Consumption: You majored in finance in college, and after graduation, you became a management trainee at Wrigley, but three years later, you jumped to Trout to do investment, what was the opportunity at that time?

Wu Zhiwei: I used to work as a sales management trainee at Wrigley, and I needed to rotate in different cities, so I stayed in Wuxi, Suzhou and Nanjing.

At that time, there was no talk of e-commerce, and the channels for the circulation of consumer goods were mainly concentrated in several parts: hypermarkets, traditional wholesale channels, and husband-and-wife stores.

We had to take care of these channels, but after traveling to three places, one day I suddenly realized that the resources accumulated in this job could not be taken away. For example, the dealer network established in Wuxi cannot be brought to Nanjing, and the procurement resources of hypermarkets can only be fixed locally.

What's more, I realized that the increase in sales performance is largely due to the brand itself. Although an individual's sales ability can contribute to growth, it may not account for more than 20%.

It's actually quite simple to figure this out, just ask yourself if those so-called connections will recognize you after you leave. The reason why many people fall into a kind of "fantasy" is mostly because they have not been so self-reflective - it is obviously an opportunity given by a brand or platform, but they mistakenly think that it is their own ability.

So, I came up with the idea of changing jobs.

Coincidentally, Trout was forming an investment company focused on the consumer goods sector at the time, and I had both a financial background and experience in the consumer industry, which was a bit of a matter of fate.

Inspur New Consumption: After that, I stayed in Trout for 8 years, what attracted you to continue to do it?

Wu Zhiwei: My experience in Trout can be divided into two stages.

For the first five years, I had the privilege of working with Mr. Dundelon (Global President of Trout Partners) to learn and practice as I went, and more importantly, to leverage investment through brand positioning consulting. My goal is also very clear, which is to learn the ability of brand positioning.

In 2015, the company ushered in a very important person, Mr. Yang Aixing, the former president of JDB. Not only is he involved in the investment business, but he also serves as chairman of the board of directors of Betis Olive Oil, the company's holding project. The three years I worked with him had a profound impact on me, because I really helped to apply the brand positioning theory to the operation of the business.

However, it is impossible to be so excited every day in the past eight years.

In the first few years, there were few investment projects, and there were no successful IPO cases, so the sense of accomplishment was actually insufficient. And at that time, there were very few investors in the consumer sector, and the Internet was the mainstream, so I would also doubt whether consumer investment was worth a lifetime.

But when you are at a low point in your industry or life, the only mentality is to "boil", which refers to not lying flat, but actively seeking a breakthrough. It's like sales strategy and positioning, which are not thought out by sitting in the office behind closed doors, but groped out in front-line practice. So you get to the front line, keep trying all kinds of methods, and always find a way to break the game.

In the later stage, I have formed my own set of investment logic and philosophy, tending to subdivide the traditional consumer enterprises at the head of the category, but Trout gradually transformed to the new Internet economy, and invested in high-flying enterprises such as Guazi second-hand cars, and many of the projects I pushed were often difficult to pass, which finally prompted me to leave and found Plank Road Capital.

Inspur New Consumption: Many industry leaders will suggest that we do what we like, but some people think that this is a lie - they have gained some sense of accomplishment from long-term work, and they think that it is from the love of the heart. For you, is brand positioning a matter of your heart, or is it the result of constant positive feedback?

Wu Zhiwei: I think the two are mutually reinforcing.

First of all, you need to know if you plan to work in one field for a long time. Some people like to try new things, do one one day and change another tomorrow.

There is no good or bad way of thinking about either of these two ideas, but if you are determined to take root in a field for ten or twenty years, it becomes very important to find pleasure in it, otherwise it will be painful. However, this liking may be innate, or it may be acquired.

Take myself as an example, I like to spend a lot, and this "love" makes me more productive. Because when I accompany my wife to go shopping, eat out, or travel, I can observe and study anytime and anywhere, such as keeping an eye out for new drinks or alcohol.

Dig deeper into this passion, which is actually closely related to the individual's growth environment, personality traits and past experiences. I may be in a special situation, I have been in the consumer industry, and there is both the factor of luck and the element of my own persistence.

There is data that shows that people usually don't really start their careers until they are around the age of 28. In other words, in the three or five years from graduating from college to the age of 28, it is normal to keep changing and trying. But at the age of 30, you must be clear about your future career path, after all, the construction of core competitiveness takes ten or twenty years of precipitation.

Inspur New Consumption: How do you position yourself in the process of career development?

Wu Zhiwei: I position myself as a "positioning investment leader", that is, the one with the strongest investment ability in the field of brand positioning and the most understanding of brand positioning among investors.

This is inseparable from my past experience: in the 17 years since graduating from university, I have been in the field of consumption, and the combination of industrial sales experience, consumer investment experience, and positioning consulting practice has formed my unique positioning label.

However, this positioning was not clear from the beginning, and it was not until around 2021 that it gradually became clear:

On the one hand, after several years of development, we have helped many companies to successfully go public, which proves the effectiveness of our positioning theory in practice, and it has completely departed from the traditional system of Trout.

On the other hand, in the face of the wave of influencer brands set off in 2020-2021, we basically did not step on the pitfalls, and the comments and predictions of these brands at that time were fulfilled one by one in the following years, which also shows that our analytical logic and methodology are highly reliable.

That's when my personal identity was established.

The changes brought about are also obvious, at first I talked to others about consumer investment, many people did not understand, but after a few years, gradually, people around me knew that I was doing consumption, and once there was a related project, they would come to me - this is the charm of positioning, it can attract more and more resources to you to move closer.

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Inspur New Consumption: Deep cultivation can make people have a deeper understanding of the bottom of the industry, but it can also fall into the trap of a fixed thinking framework. How do you avoid falling into overconfidence in your brand positioning?

Wu Zhiwei: Brand positioning is an excellent tool, but my ultimate focus is on investment, so I look at things differently.

In the framework of investment logic, the evaluation of a company mainly looks at the three dimensions of brand positioning, product and channel, as long as two of them are excellent, I will consider investment. For example, the brand positioning of the Shuanggun shares we invested in actually has a lot of room for improvement, but the channels and products are powerful enough to constitute a reason for investment.

Therefore, brand positioning is a powerful starting point, but it is not a master key. If the core competitiveness of the industry is reflected in cost control, and you only talk about brand positioning, I definitely don't dare to invest.

For example, we have invested in Dessmann, many people may think that the threshold of consumer electronics lies in product technology, but in fact, the core competitiveness of smart locks is marketing.

There are two concepts that need to be clearly distinguished here: industry barriers and core competitiveness.

The barrier represents the difficulty of entering new players, and the technical requirements of the consumer electronics industry are high, so the barriers are high. The core competitiveness refers to what the enterprises in the industry rely on to win. When technology tends to be homogeneous, it is no longer a core competitiveness.

In a one-time consumption such as smart locks, which is related to security and has a high unit price, consumers' purchase decisions are largely determined by brand awareness, that is, they prioritize what they have seen and heard. This means that marketing touchpoints are important, both in terms of offline stores and advertising.

So, having a clear brand positioning and being willing to spend money on marketing has a chance to win.

In the final analysis, it is extremely important to deeply understand the characteristics of the industry, understand the barriers and core competitiveness of the industry, and then examine whether the company has the advantages to match it.

Inspur New Consumption: There are many strategic theories in the market, why is the positioning theory so influential?

Wu Zhiwei: It has been nearly 50 years since the birth of the brand positioning theory, and it has a history of 20 or 30 years in China.

The reason why positioning theory can take root in China is naturally closely related to the characteristics of the country itself:

First, thanks to China's vast land area. In this land, a single product category is enough to breed a specialized brand, similar to the United States. Relying on the local and global market, the United States has nurtured a large number of specialized brands, which is actually in line with the "focus" principle emphasized in positioning theory. In contrast, Japan and South Korea are limited by the market size and are difficult to support the development of professional brands.

Second, it just caught up with the 30 years of China's economic take-off and from selling goods to branding. If you go back to the seventies and eighties, the people are still struggling for food and clothing, and there is no way to talk about brand positioning; On the other hand, if the market is as mature as Europe, and all walks of life have been monopolized by giants, it is also difficult for positioning theory to exert its strength.

Third, some of the ideas in this set of theories, such as "simplicity and focus", are in line with traditional Chinese wisdom and are easy to understand and accept. In addition, Chinese entrepreneurs have always been rational and are willing to spend more than 20 million yuan to hire Trout or Kmind to do consulting, and the logic behind it is very simple: this set of theories is practical, and the benefits it brings far exceed the input costs.

Therefore, the continuous emergence of success stories and word of mouth among entrepreneurs has made this school of thought more and more influential.

Inspur New Consumption: So after the emergence of these new technologies and new production capacity of AIGC, will there be some impact on the positioning theory, and how to ensure the advancement of the theory?

Wu Zhiwei: First of all, positioning theory provides an idea for studying the competitive landscape.

Second, the psychology of consumption that it delves into is actually a group behavior, which is inherent in human DNA and has remained unchanged over millions of years of evolution. Kahneman, the recently deceased Nobel laureate in economics, proposed that people's economic decisions are deeply influenced by their psychological state, and finally concluded that people are never rational animals.

Positioning theory is based on this underlying ideological framework, and is an effective tool condensed after in-depth study of sociology and human psychology. For example, after the rise of the Internet, everyone is still talking about "how to implant in the minds of consumers". Therefore, the manifestations of theories are different, but the principles behind them are all the same.

It's just that with the rapid development of the information age, new categories are constantly emerging, and you need to add these new elements to the theory and carry out some iterations.

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Inspur New Consumption: When you founded Plank Road Capital, what other deterministic trends did you see in consumer investment?

Wu Zhiwei: Back in 2015, I observed the rise of Tmall and the fact that many cutting-edge brands began to use this new channel to make their voices heard, compared to some traditional brands that were more conservative and reluctant to try. In 2018 and 2019, the first batch of cutting-edge brands went through the screening of the market and eliminated them, while the survivors ushered in the second wave of growth.

A similar situation happened with Douyin e-commerce, which was first seen by most people, but by 2024, Douyin e-commerce has become the standard for brands.

This shows that the emergence of new channels has created opportunities for new brands and brought new windows for investment, which is a major core of our investment logic.

Take the example of Daxidi Steak, which I invested in in 2018, which quickly rose to prominence with the help of the east wind, and although this channel has now disappeared, it is not important. The initial channel selection only helps you complete the first phase of growth, and does not hinder the future omnichannel development. In other words, there is no inevitable causal relationship between what channel you start from and whether you can grow into a brand.

The "white label" and "brand" that we often talk about now may only correspond to the different stages of development of the enterprise, and of course, it may also be the result of the founder's value orientation.

If you purely use low prices as a means of competition and ignore the pursuit of quality, it is indeed a typical white label, and it is unlikely to transform into a real brand in the future. Because in the long run, everyone's pursuit of a better life remains the same, people may prefer cost-effective products, but the absolute low price is certainly not the direction of future competition - the so-called brand, is to pull you out of the "strange circle" of price war and traffic war.

On the contrary, if an enterprise has a brand mindset, adopts differentiated positioning and unique operation strategies, and gradually advances with the help of channel dividends, it is actually expected to grow into a brand. Even mineral water can build a brand, let alone other categories?

Even today, there are still many opportunities for brands to start their own businesses in the market. When you think of a consumer goods category, but you can't name the first or second brand, it means that there are untapped business opportunities in this field, but the difficulty is different.

Inspur New Consumption: Therefore, in addition to the improvement of industry trends, we should also pay attention to the background color of enterprises. In the past few years, the reason why investment institutions have stepped on a lot of pitfalls in consumption may be that they feel that everyone can understand consumption, and lack of awe of the industry and understanding of the essence.

Wu Zhiwei: I think there is a lower logic: as you grow, you will find that the simpler things appear on the surface, the higher the implicit threshold. The fundamental reason is that everyone does, and it is difficult to make a difference.

Take egg fried rice as an example, everyone can fry it, but if you really want to compete to see who makes it better, it's very difficult because the competition is too fierce. Consumption is the same, everyone can understand it, and even comment on two sentences, but it is difficult to delve into it, because the underlying logic of consumption is extremely related to psychology and even sociology.

I often tell my team that if you want to understand human nature, you must read classic literature, because human nature has not changed for thousands of years, and literature is the most penetrating portrayal of it.

"Dream of Red Mansions" is a classic precisely because the scenes it depicts have resonated widely and withstood the test of time. As for the grasp of group psychology, it is necessary to dabble in sociology, and there are many related works in Europe, such as "The Rabble", which deeply analyzes the group effect.

Only by mastering these underlying logics can we see through the superficial phenomena. If investment only needs to simply chase hot spots, then wouldn't anyone be a master of investment?

As far as I can see, a good consumer investment institution must have a member of the investment committee who understands consumption, otherwise everyone will not communicate on the same channel. The first thing people often say is: "Anyone can do this, where is the threshold?" "I was stunned at once.

Because there is no strong explicit threshold for consumption itself, but in actual competition, the implicit threshold is very high.

For example, mineral water, if you invest in a small factory, you can also irrigate water and sell it, it seems that there is really no threshold, but those who dare to enter it now are the ignorant and fearless, because its biggest threshold lies in the channel. Cost is also very critical, water may not be valuable, but the logistics and labor costs of transporting water from the factory to the shelf are not cheap, and if it can't be sold, that inventory is worth nothing. Evergrande Ice Spring is an example, thinking that someone would buy it if it was reduced from 5 to 1, but no one wanted it when it was reduced to 5 cents.

Therefore, it seems that there is no threshold, but in fact, the threshold is very high.

Sometimes, the first threshold may be marketing, such as making clothing, you must do big advertising; Or the cost, like rice, flour, grain, oil, milk, cost control is king, from the source of raw materials to production and processing have to be carefully calculated; or product-driven, such as DJI, Apple, and Sony, the products themselves are powerful, and publicity can almost win the market; It may also be operation, and running a café or restaurant requires the ultimate operational ability.

Therefore, you must first understand what your category is, and then cooperate with the correct brand positioning, after all, you still have to let consumers know what you do.

Inspur New Consumption: But in fact, many companies are slowly adjusted and eventually grown, if a brand positioning is anchored at the beginning, will it erase the possibility of the future?

Wu Zhiwei: This is actually related to the background of the company's growth.

Many old brands started recklessly, such as hometown chickens started with chickens, and in that era when the competition was far less fierce than today, they had enough time to explore and find opportunities while walking.

But now when starting a business, the situation is completely different – there is a general oversupply, and this is true in almost every industry. Occasionally, there is a shortage of supply, and it will be quickly wiped out, just like new energy vehicles, and the production capacity will be piled up in just one year.

Therefore, at the beginning of your business, even if you don't talk about positioning, you have to deeply study the market competition and clarify where the differentiation you are doing, which is essentially positioning. Otherwise, if everyone can do it, where is your value? In other words, positioning thinking actually runs through entrepreneurship.

However, the wrong positioning does not mean that there is a problem with the tools and ideas themselves, but only because everyone's thinking logic, understanding of industry competition and their own abilities are different, which leads to the deviation of the results.

Entrepreneurs who want to use positioning effectively cannot mechanically copy theories. According to my observations, those companies that are well positioned are, firstly, the founders have a keen intuition about it, and secondly, they will digest and absorb the theories, and then flexibly adapt them in combination with the internal resources of the enterprise.

Investing in 3 consumer IPOs in five years, Wu Zhiwei of Plank Road Capital: How to find the right brand positioning in the midst of changes

Inspur New Consumption: Recently, everyone has been talking about a topic: layoffs in large factories, there are a lot of former high-level executives circulating in the market, and many people have also started businesses, but they will soon find that from 10 to 100 they relied more on the platform behind them, and it was much more difficult to go from 0-1.

When you came out of Trout to start your own business, did you also go through some very difficult moments, and how did you balance and digest this pressure?

Wu Zhiwei: The difficulty does exist, but it is not the change of mentality, because I understood early on that the platform in the past was unreliable, and I still had to rely on the ability and resources mastered by individuals, such as brand positioning and external communication capabilities, as well as the accumulated LP resources.

The biggest challenge for me in founding Plank Road Capital is that I used to be the head of investment, and although I knew that fundraising was as important as investment, in fact, fundraising had little to do with my work, and after I went it alone, I found that fundraising was actually more important than investment.

At the beginning of the establishment, the source of funds was already somewhat certain, but the second and third rounds of fundraising were the real test. While the performance of our fund was already beginning to show at the time, the volatility of the past few years has exacerbated this challenge.

In the face of this pressure, you can only bite the bullet, after all, entrepreneurship is the process of facing difficulties.

Still, I'm very optimistic:

First of all, even in the current environment, I still firmly believe that there are opportunities for the Chinese market to come out of 2-3 world-class brands, and it is my lifelong pursuit to find and help them grow. Not to mention the regional market and sub-categories, there are more opportunities to come out, after all, China's huge population base and people's internal motivation to pursue a better life are there.

Secondly, I believe that professionalism must be the trend of the future, rather than relying on personal connections, and there will always be investors who recognize our professional ability that can truly create value for them. Our previous funds have proven this, some LPs didn't know me at first, but gradually got to know us through our performance and research reports, and gradually provided resources to tilt, and even some portfolio companies became our LPs.

Inspur New Consumption: With the development of the stage, you will also expand some new tracks, how do you start?

Wu Zhiwei: I tend to start from the field and invest a lot of time in the market and business ports.

Because in my opinion, to really understand an industry, you have to go to the front line and understand how salespeople sell and how consumers think.

With an in-depth understanding of the industry, we have extensive exposure to leading brands in the industry, so we have a good understanding of the competitive landscape of the market. The decision to invest in a company is not only based on the knowledge and recognition of itself, but also because it has thoroughly investigated the full range of information such as competitor evaluations, dealer feedback, inventory status and so on - this is the market visit method I learned from Wrigley, which we call "Tianlong Babu".

Taking the small category of fishing equipment as an example, we spent more than a year in the early stage, inspected all the brands, visited the foundry, and conducted in-depth front-line research, and finally determined that this is a good track worth investing in, so we found the KastKing project.

Therefore, we must first confirm whether the track meets our needs, whether there are growth opportunities, whether it can withstand cyclical fluctuations, and then look for the top companies in the track. Of course, the leading enterprises are relatively easy to find, and the key lies in how to find the right opportunities and what kind of advantages and capabilities to intervene.

This series of actions usually takes about two years, and once there are successful cases in this track, whether it is extended upstream and downstream or into the associated track, it will be much smoother.

Inspur New Consumption: So we will spend more time researching the industry, rather than obsessing with the company itself.

Wu Zhiwei: Yes, in fact, the research industry is the most critical part. If you don't have an in-depth understanding of the core competitiveness of the industry and the dynamic competitive environment, just paying attention to the brand logo on the surface is tantamount to a peek in the tube. Today, if this brand is hot, you will vote, are you sure that it will still be so hot in three years?

You first have to understand what is the deep-seated reason for its popularity. And when the track is hot, competitors will follow, which requires an understanding of the complexities of a dynamic competitive environment.

We came up with a concept called "Dark Energy Carriers", which may seem like nothing to do with the track right now, but can be game-changing once they get in. Just like Meituan, after getting involved in the power bank business, it quickly surpassed the first mover, and this kind of competitor is especially terrifying.

Second, once you've eaten through the category, you need to think about whether the current challenges of the project are major or secondary. For example, for cups, the product is not the core, even if there is a problem, it is relatively easy to improve, but for the catering industry, a mess of the product is the core contradiction, and the project can be passed directly.

So, the core is to grasp the trunk and then see if the other branches can improve.

Inspur New Consumption: How do you stay calm when the market is very noisy?

Wu Zhiwei: First, I have been "accompanied" in some industries for a long time and have experienced several cycles of fluctuations, so I know what difficulties the industry will face.

For example, in Trout, I served the village-based Chinese fast food project for eight years, from the listing on the New York Stock Exchange to the popularity of takeaway, it took several years to pull the proportion of takeaway from 5% to more than 30%, and then the New York Stock Exchange encountered a series of challenges, experienced delisting, privatization, and some twists and turns in the corporate governance structure, I deeply understand what obstacles and misunderstandings will exist in Chinese catering. Therefore, when offline catering investment picked up in 2021, we didn't step on the pit.

Second, we have been involved in retail, agricultural products, and other fields, and we have both experience and lessons, and each time it has driven me to delve into the underlying logic behind success or failure.

Thirdly, I always remember that when everyone flocks to one place, it's definitely not a good opportunity. Moreover, the Internet celebrity project is more concerned about financial strength, which is not our advantage, what we are good at is empowering brand positioning, so there is no match between the two.

Inspur New Consumption: You also mentioned that a particularly good company does not lack cash flow and may not be willing to introduce capital. But in the case that "reliable shares" are not "short of money", how did Plank Road Capital invest in it?

Wu Zhiwei: The cash flow of high-quality consumer enterprises is usually very healthy, in summary, if you give it 100 million, it is not lacking; Give 1 billion, and it can't be spent. Therefore, investing in consumer-oriented enterprises must not rely only on capital.

Speaking of the "Reliable Shares" project, we have been focusing on the silver economy since 2018, and the logic is simple, this market has great potential.

First of all, we had to choose the category, we looked around at the time, and finally locked in the adult diapers that are just needed at high frequency - referring to the development of the baby diaper market, we think this is a category that will take the lead in rising. Because once China enters an aging society, the real need to take care of the elderly will make diapers a necessity.

After confirming the investment value of the category, we began to visit the relevant companies comprehensively, and finally targeted the reliable shares that are the first in the industry.

The contact process was actually quite tortuous, and the conventional methods of phone calls did not work, but luckily, we managed to meet through their IPO lawyers. 99% of OEM companies have the dream of building their own brands, and reliable shares are no exception, so we have made full preparations for this and exported a lot of understanding of the industry when we met.

That exchange made them feel our professionalism and built an initial trust. At the same time, we also learned about some of the internal situation of the company.

The second time we met, we went with a preliminary brand positioning plan, which included suggesting that the main brand focus on adult diapers, and separating the brand from the factory to facilitate recruitment and establish brand thinking. Although it is still far from investment at this time, everyone's sense of vigilance has been lowered a lot.

They felt the style of our team and the ability to position the brand, as well as our character and sincerity, which are two things that founders of consumer companies value when choosing investors.

The subsequent investment was a coincidence, and there was an early investor in Reliable Shares who wanted to exit.

Inspur New Consumption: A company's brand positioning will directly lead to the corresponding operational alignment, so for those companies considering strategic repositioning, what will be the most difficult obstacle to overcome in the transformation?

Wu Zhiwei: In fact, most people in life have not yet formed a brand mentality, and most of them have gradually transitioned from selling goods to trying to be a brand, but they don't know exactly how to do it. Some of them, even if they have already started, may be in the wrong direction.

If you want to find help from top consulting companies such as Trout and Kmind, the high cost is a threshold, and the results cannot be guaranteed, so how to take the first step in brand building is very important.

In my opinion, the first thing to do is to establish a brand mindset, and there are some key changes that can directly drive growth and at a low cost. After the establishment of thinking, and then gradually do the operation of the matching, this process will last 3-4 years, not overnight, you can't think of one step, as soon as you change the design, advertising, so that once you do it wrong, it will cause a lot of losses. Even the advertising of reliable shares has only recently begun.

As investors, our perspective will focus on the long-term development of 3 to 4 years, which is different from the pursuit of short-term results by consulting firms, so the two are compatible.

Inspur New Consumption: What kind of founders will you lean towards?

Wu Zhiwei: I tend to be simple and focused.

Because of my background and areas of focus, I tend to look for like-minded founders to start and grow together. All the projects we invest in, the founders are very low-key and simple, so their business is also very focused, and they can summarize what they are doing in one sentence, smart locks, fast food, storage boxes, artificial turf, etc., there is no particularly complex business model.

The preference of some foreign institutions is also very clear, and they tend to invest in entrepreneurs who have overseas elite school backgrounds, overseas jobs and work experience in large factories, which actually makes sense. This type of person may be a good fit for the tech sector, but if it is a consumer, it may not be very down-to-earth.

If you want to do a good job in consumer entrepreneurship or consumer investment, being close to the masses is the last word.