Chapter 166: Chapter 154: Zhang Xuhao: Messed Up, Lost 100 Million in Financing

Chen Yansen returned to Building 8 and took the elevator to his fifth-floor office.

Lunch, ordered by the administration department, was on his desk. It was a spread of five dishes and a soup, complete with four sets of bowls and chopsticks. The restaurant had also included a few complimentary drinks.

"Old Gao, get Ye Qiuping in here. And have Wang Xueting from the HR department come up too."

Chen Yansen sat down, but instead of starting to eat, he called for Gao Weilin and the others to join him.

Eating was secondary; his main goal was to discuss the expansion of Orange Technology and the progress of recruitment for Pinbei Technology.

A few moments later, Gao Weilin, Ye Qiuping, and Wang Xueting arrived together.

"Boss!" the three of them greeted from the doorway.

"Come in. We’ll talk while we eat."

Chen Yansen rolled up his sleeves and gestured for them to sit.

"Thank you, Boss," Gao Weilin said, taking a seat first.

Ye Qiuping and Wang Xueting exchanged a glance before sitting down next to Old Gao.

Wang Xueting was a human resources management graduate from Tongji University. She had previously worked for many years at a communications company in Hu City before Chen Yansen poached her for Orange Technology with a monthly salary of over 40,000.

She was the one who had recruited Zhang Cong and Zhou Ze, two titans in the field of industrial design.

"What’s the status of Pinbei’s recruitment? First, help me build the framework for the HR department. In the initial phase, focus on developers and merchant recruitment staff."

Chen Yansen picked up his chopsticks, popped a shrimp into his mouth, and looked at Wang Xueting to ask his question.

"Right now, there are two suitable candidates for HR manager. One is Xiong Li from Jingdong, and the other is Zhang Junjie from Sunning. They both have extensive experience in e-commerce, and Xiong Li also has experience in business operations."

Wang Xueting answered immediately.

"President Ye, are you familiar with him?" Chen Yansen turned his gaze to Ye Qiuping.

"The head of recruitment for Jingdong’s small home appliances division. He’s very capable—understands both HR and business," Ye Qiuping replied after a moment’s thought, giving a positive assessment.

"Arrange interviews as soon as possible. If they’re a good fit, hire them both."

Chen Yansen nodded, making the decision on the spot.

"Yes, Boss," Wang Xueting replied.

"The recruitment progress for Orange Technology and Pinbei Technology is slower than I expected. Like this: draft an internal referral bonus program. The reward amount should be comparable to the cost of using a headhunter. Have it on my desk before the end of the day."

Chen Yansen added after some thought.

Take Orange Technology, for example. Most of its employees came from other mobile phone manufacturers like OPPO, Xiaomi, Huawei, and ZTE.

Having them make internal referrals could significantly speed up the recruitment process.

After all, they were familiar with Orange Technology’s compensation and work environment, making them more persuasive when communicating with their old colleagues.

"Understood, Boss," Wang Xueting replied instantly. The HR department currently had only six people, including herself, and the interview rooms were fully booked every day.

Yet the total number of employees at Orange Technology was still only just over 200.

It wasn’t that the pay and benefits were bad; rather, Orange Technology was developing so quickly that their hiring speed couldn’t keep up with the demand for new staff.

"Old Gao, has the payment for the Orange Phone Factory’s equipment been sent?"

Chen Yansen put down his chopsticks and asked Gao Weilin.

"A total of 34 production lines. The equipment funds, 1.37 billion in total, were transferred directly to the suppliers’ corporate accounts."

Gao Weilin had been on several business trips with Chen Yansen and knew his personality, so he answered casually, explaining as he ate.

This was why most mobile phone manufacturers chose to use contract manufacturers. Before a single phone was even produced, the equipment alone cost over a billion.

But for Chen Yansen, the money was well spent.

Once the factory started production, it could accommodate over 5,000 employees and would bring him 4,000 wisps of Human Dao Fire per month.

Monthly production capacity could increase from 500,000 units to 3 million units!

The netizens on Weibo who had been accusing Chen Yansen of playing games with them would also quiet down for a while.

From August to early October, the factory’s total shipments were about 1 million units, but total pre-sales were 3.5 million. 70% of the orders had yet to be produced.

Although Chen Yansen was very popular, some impatient customers were still flooding his comment section, demanding he ship their orders. A good number of them were even cursing him out.

"What about the brand department? How’s the online sentiment and user feedback?" Chen Yansen looked at Ye Qiuping, sighing internally. ’This woman is truly resilient.’

Even knowing she’d been investigated from top to bottom, she could still remain calmly at Orange Technology and was now sitting across from him, eating at ease.

Wang Xueting looked nervous and reserved, but she was as relaxed and comfortable as if she were at home.

"Aside from the insufficient production capacity and the poor signal caused by the aluminum alloy back cover, user feedback shows that the Orange Mobile Phone’s positive review rate is much higher than the Xiaomi Mobile Phone’s. The data department’s sales model predicts that if we solve the production issues, monthly sales could increase by more than threefold."

Ye Qiuping looked up and spoke slowly when Chen Yansen addressed her.

"Just one more month. Wait for Shencheng City to complete its hiring and equipment calibration."

Chen Yansen’s tone was calm.

While the aluminum alloy back cover affected signal reception, it improved the phone’s structural integrity and heat dissipation.

Compared to the Xiaomi Mobile Phone, the Orange Mobile Phone’s smoothness and user experience were clearly a level above.

As a result, after Xiaomi’s pre-sales exceeded 700,000 units, they were flooded with negative reviews online. Many people joked that it got hot enough to fry an egg.

If the Orange Mobile Phone didn’t exist, users might have tolerated Xiaomi’s overheating and lagging for the sake of its extreme cost-effectiveness.

But with more choices available, who would be willing to settle?

After lunch, Gao Weilin, Ye Qiuping, and Wang Xueting left the office.

Chen Yansen propped his feet up on his desk, took out his phone, and started scrolling through the news.

Ah Li had increased the annual technical service fees and store default deposits on Taobao Mall, angering small and medium-sized sellers.

These sellers were retaliating by going to larger merchants’ stores to place orders, then immediately cancel them, and spamming them with negative reviews to vent their frustration.

To put it bluntly, Ma Liyun felt the sheep had gotten fat, and it was time for the harvest.

But the small and medium-sized sellers didn’t see it that way. Last year, Ah Li had quietly adjusted its search algorithm, directing all the traffic to large and branded merchants. Their income had plummeted, and they had been stewing in resentment ever since.

This unilateral price hike had thoroughly enraged them. Hundreds of sellers even went to protest outside the Ali Headquarters.

"Go ahead and cause a scene! The more chaotic the market, the better!"

Chen Yansen thought to himself, muttering under his breath.

What kind of person was Ma Liyun?

Even if he compromised temporarily, he would definitely come back to deal with this group later.

He, like Zhang Yong, believed that as e-commerce developed and the economy grew, user demand for product quality would continuously increase, and so would the average customer transaction value.

Thus, they had abandoned the six-trillion-yuan sinking market.

But three years later, Pinduoduo would burst onto the scene, completely upending the e-commerce landscape. It would force Ah Li to launch Tao Te and Peach Factory, and Jingdong would be tricked into launching Jingxi and Jingxi Sale.

But by then, the tide had turned. Pinduoduo would play its trump card—"refund only"—firmly capturing the hearts of users. It would then advance triumphantly, breaking into the top three e-commerce platforms.

Chen Yansen’s Pinbei was based on Pinduoduo’s business model. His goal was to take over the small and medium-sized sellers abandoned by Ah Li and Jingdong.

Take the mobile phone industry, for example. A 1,999 yuan phone was just a mid-range smartphone for many, but there were still plenty of people who couldn’t afford it.

Feature phones and knockoff phones priced at 299, 499, and 699 yuan never lacked for customers.

Whatever exists is reasonable!

It was perfectly normal for a multi-trillion-yuan sinking market to give birth to an e-commerce behemoth.

Chen Yansen just needed to go with the flow!

He swiped the screen. The second news item was about the death of Apple CEO Jobs. Apple was about to enter the Cook era.

The rest of the news focused on the fierce competition among group-buying websites. Lashou, WoWo Group, Nuomi, Dianping, and Meituan were in a chaotic battle, poaching each other’s staff and offering huge subsidies, all vying for market share.

What surprised Chen Yansen was that in this life, Lashou and Nuomi Network had exceptionally strong momentum. Their online marketing was excellent, and they could even compete with Meituan’s prized ground promotion teams.

If this trend continued, the "war of a thousand groupons" would not be decided anytime soon.

Chen Yansen frowned. After selling FoxTao, his influence in the group-buying industry was virtually zero.

He didn’t care who would ultimately win the group-buying competition.

Anyway, between 2011 and 2013, both group-buying and food delivery were money-losing ventures.

After Eleme secured a $1 million financing round at the beginning of the year, it had barely made a ripple in the industry.

Venture capitalists seemed to have forgotten the food delivery track entirely, showing no interest in initial or follow-up investments.

Thinking of this, Chen Yansen called Old Gao and told him to try and contact Zhang Xuhao.

On one hand, by investing early, he could make a huge profit in the future regardless of whether Ah Li or Meituan acquired Eleme. On the other hand, it would allow him to participate in Eleme’s daily operations.

He was making preparations for his next move.

After listening, Gao Weilin immediately agreed.

After joining Senlian Capital, he originally thought his job would just be buying things and making investments. Instead, he had ended up as the CFO of Orange Technology, and from time to time, he even had to help the boss pay the final installments on cars and houses.

This was nothing like being the head of an investment firm; he was practically Chen Yansen’s butler.

This time, he could finally put his professional skills to use. But after doing a deep dive into Eleme, he was instantly dumbfounded.

’Who the hell came up with such a fucked-up business model?’

’There was no hope of profitability in sight!’

The platform managed to displease both buyers and merchants.

To make a profit, merchants had no choice but to increase their online prices, since packaging, delivery, and platform commissions added to their costs. Buyers, on the other hand, were unwilling to pay more, feeling that the platform was just passing the costs on to them.

Founded two and a half years ago, Eleme had only ever received a single round of funding. With just over 3,000 orders per day, after deducting management and technology costs, Eleme was actually losing money.

Gao Weilin wanted to talk Chen Yansen out of it, but in the end, he sighed and chose to trust his boss’s judgment.

’When it comes to business, ten of me wouldn’t be a match for the boss. I should just do my job. If I overstep my bounds, I’ll just end up making him unhappy.’

Two days later, Zhang Xuhao received a call from Gao Weilin.

"One hundred million, and Senlian gets 30% equity," Gao Weilin stated the offer upfront.

"US Dollars?" Zhang Xuhao asked tentatively.

"Hua Yuan," Gao Weilin sneered. ’This guy is dreaming,’ he thought. ’At Eleme’s current scale, even a valuation of 200 million is generous.’

Zhang Xuhao fell silent. He had been wondering lately if he should change the product’s name.

Eleme?

He really was hungry now!

In the past two years, aside from the $1 million in financing from Jinsha Venture Capital, he hadn’t received a single penny from any other VC.

He wanted to expand the market, but he had no money!

’This damned name is like a curse!’

He wanted the 100 million in funding, but he was reluctant to give up 30% of his equity.

After some thought, Zhang Xuhao said he needed to consider it. After hanging up, he immediately researched Senlian Capital’s background and discovered that the boss behind it was Chen Yansen.

An idea immediately struck Zhang Xuhao. He took Senlian Capital’s offer and went to talk to Jinsha River Venture Capital, Redwood Capital, and Gao Ling Capital, using it as leverage to drive up his company’s valuation.

This greatly puzzled Zhang Lei of Gao Ling Capital. He had studied Eleme’s business model before and, frankly, wasn’t impressed.

In his view, Chen Yansen had good business sense; logically, he shouldn’t be interested in Eleme.

So, Zhang Lei called Chen Yansen.

Only then did Chen Yansen learn about Zhang Xuhao’s little trick. He laughed and denied it, saying, "I’d invest in group-buying before I’d invest in food delivery."

After the two exchanged pleasantries and hung up, Chen Yansen snorted inwardly. ’That guy Zhang Xuhao looks honest, but he’s so devious. I can understand his actions, but it still pisses me off to be used like that.’

He instantly dismissed the idea of investing in Eleme.

As expected, anyone who managed to make a name for themselves during the golden decade of the internet was no simple character.

Although Chen Yansen himself wasn’t a particularly moral person, he preferred his partners to be. As for someone like Zhang Xuhao, who was too clever by half—he’d rather invest in Meituan.

Before long, Zhang Xuhao realized he had messed up. He had not only offended Senlian Capital but also missed out on a financing opportunity.