Lessons from Dangdang.com, Luckin Coffee, and Bitmain: Companies that continue to operate despite internal turmoil

In the first half of this year (2020), three companies experienced major crises, but they continued to operate their businesses and make money. I think if an individual encountered a crisis of this magnitude, how could he still make money? The anti-fragility of a company is much stronger than that of an individual.

The company is operating normally during the crisis

At the beginning of the year, Luckin Coffee was exposed for financial fraud. At that time, various fake news on the Internet claimed that Luckin was going to go bankrupt, that it was finished, that the store was being run, and that suppliers were demanding payment...

I am very stingy when it comes to coffee. I only drink Nestle canned instant pure coffee powder, which costs 79 yuan including shipping and can be consumed for half a year. Last year, Luckin Coffee was so popular that I never bought it. But this year, I saw the news that Luckin Coffee was so bad, so I wanted to know if they were operating normally, so I went out of my way to buy my first little blue cup.

As a listed company, Luckin Coffee would be devastated if it committed financial fraud. However, Luckin Coffee's offline stores are operating normally, and the waiters' smiles are more professional than those of the Heytea store next door.

Dangdang.com has contributed a lot of gossip this year, dominating the hot searches many times. As a husband-and-wife shop, the two founders and their parents-in-law are fighting each other. What I see is eye-catching, a lot of gossip.

I haven't bought books on Dangdang for a long time, at least 3 years. This time, Dangdang was in such a heated internal struggle, I found my Dangdang account that had been inactive for several years and logged in. Dangdang was normal.

This year, Bitmain's founder dispute broke out, which contributed the most to the cryptocurrency circle. There was a fight over the official seal, an open letter, and various short videos. It is hard to imagine that a company can be so chaotic.

But Bitmain's business is operating as usual. I still use btc.com to check transactions. Antpool & btc.com mining pools are still in the top five in terms of computing power, and mining machines are still sold as usual. I also registered matrixport two weeks ago and can still borrow money.

In 2020, there is also the coronavirus and the Sino-US trade war. These three companies are courting their own death, and the overall environment will not favor them either.

Why can they withstand such a big crisis?

Personal vulnerability

On the other hand, for an individual, the slightest problem will affect his productivity.

If I’m in a bad mood, I can’t work for the day; if I have a cold, I can’t work and take a rest; if I worked overtime too late yesterday, I won’t get up today…

I have been working as a freelancer for many years, doing things by myself. I have a deep understanding of the fragility of individuals. If I get a little upset, my work plans for the next few days will be messed up.

This year's covid19 has had a huge impact on me. For more than half a year, I couldn't make any money and could only sell coins to make a living.

Antifragility of organizations

What can we learn from the huge difference in productivity between a company in the midst of a major crisis and an individual facing minimal life disruption?

Whether you are running a company, an individual facing the entire market, or the main labor force of a family, you should learn from companies that can withstand major crises.

The first is the digitalization and productization of the business.

From the perspective of the main businesses of Dangdang.com and Bitmain, they are all a set of programs and a bunch of codes. The main work is done by computers. Once the program is done, it can automatically take on the work, and the employees are relatively in a less important position.

In other words, we want to replace humans with robots.

Even if Dangdang is such a big company and there is such a big internal fight, I believe that most users don’t know what happened to this husband-and-wife store because they only deal with a website.

The cryptocurrency community uses products such as btc.com and antpool, which have nothing to do with Bitmain’s shareholders. The shareholder fight cannot affect users.

Last year, there was an exchange in the cryptocurrency circle, Coinex, whose owner disappeared for a few months, but the business was still operating normally. It must be said that their productization was very good.

As individuals, we should also digitize and productize our labor output.

I am not a programmer, and I am not capable of making products that can automatically receive customers. But at least we should refine our work to the point where it can be completed mechanically. This mechanical execution may still have to be done by people, of course we have to do it ourselves. But at least after mechanization, we can resist stopping work when we are in a bad mood.

I also have a job that is close to digitalization and productization when writing articles. The core of an article is the theme and outline. I usually have a lot of themes and outlines in reserve. With these, it is actually quite simple to fill in the rest of the content. With a good outline, I know very well that I have actually finished writing this article, and the rest is nothing more than typing some words to fill it in. It can even be outsourced to someone else to complete.

Another direction of effort is to abstract one's own labor force. That is, to abstract a set of methodology. With the methodology, more risks can be resisted.

The second is business process standardization and regularization.

Luckin Coffee had such a big incident, but the coffee shop staff still did their own things, still made coffee, and still smiled at customers.

For a company, the work of most employees has been standardized, or at least guided by rules. These processes and rules allow employees to ignore all kinds of noise and work with peace of mind.

For us as individuals, we should also standardize our work processes and make them regular, so that these processes and rules can constrain our work.

For example, we need to make a flowchart to guide our work. For example, we can discuss with our superiors and subordinates some rules for evaluating our work.

The third is productivity redundancy.

If a company has a big problem or internal fighting among the top management, it will definitely cause the company to lose talent. Even if there is no problem, employees will leave.

In order to operate normally when faced with risks, there must be redundancy in productivity. Having two people per position may seem wasteful, but it is an important guarantee for anti-fragility.

This is also true for us as individuals. Over-optimizing our time and resources is very dangerous. If you are currently working 14 hours a day, it is best to consider working only 8 hours a day, and use the other 6 hours to learn something useless, or do some work that does not need to be completed immediately but may be used in the future, just in case.

External Governance

I think the key to a company organization being able to operate normally under huge risks is external supervision and governance.

Imagine, as an individual, as an employee, if you are sick today, will your boss force you to work? In most cases, no, human touch is a great protection for individuals.

I would accept advertisements when writing articles. Sometimes I would receive advance payments from others, but after reviewing the topic, I would return the money if I found that my values ​​did not match. But I would often make an excuse that I had something going on recently and had no time to write articles. I have never received anyone scolding me for this.

This is the result of no external governance. Everyone thinks this is normal, and if you are sick, you will not be forced to work.

But for a company, customers will not give up their rights just because of infighting among your shareholders.

Will Luckin Coffee members give up their deposits because of financial fraud? No, members will run and curse. Will Bitmain employees dare to ignore their customers because of the bosses' fight? No, customers don't care about these.

Constraints themselves are actually a form of competitiveness.

As individuals, we are so vulnerable because we have fewer constraints. A company is more anti-fragile because it has more supervision from customers, suppliers, investors, corporate laws, etc. These are "free external governance."

We should also learn something from this. We can make our goals public, post them on WeChat Moments, and let them monitor us for free. We can ask our parents to monitor our work and spank us if we slack off.

I hope these companies in trouble can successfully overcome the crisis.