Chapter 23: Long Slopes and Deep Snow

Old Jia picked up another piece of fish head and took a gentle bite. The freshness of the meat and the spicy kick intertwined on his tongue. He pursed his lips, a gesture that seemed intended to break the awkward silence hanging in the air.

"Sigh, I must say, Yongbing’s experience is something we should take very seriously; it is a lesson to be learned." His voice was low and resonant, each word like a pearl polished through careful thought. "The key is that we must draw wisdom from this lesson. Yongbing’s concerns are indeed shared by us all. As the old saying goes, a man fears entering the wrong trade, and a woman fears marrying the wrong man—that is exactly the point here."

Expectation flickered in the eyes of everyone present; they were all waiting to hear Old Jia’s insights.

"Alright, Old Jia, just tell us your brilliant opinion! It’s rare for us classmates to get together for a meal. We’ve come from different industries to talk about our respective fields, isn't that just to spark some intellectual collision? We are all in the real economy, but you’re the only one in finance. What I admire most about you is that you can always distill the pitfalls we face in our businesses into regular patterns for us to use as a reference. So, don't hold back," Xiao Yongbing urged eagerly.

Old Jia set down his chopsticks and said solemnly, "Alright, I’ll share my thoughts. When we entrepreneurs choose an industry to enter, we must pick a 'long slope and thick snow' track. What is a 'long slope'? It means the industry has vast room for development, enough to sustain us for twenty or thirty years. If you can see the end of an industry at a glance, and it’s unsustainable after two or three years, that is not a long slope. Secondly, what is 'thick snow'? It refers to a sufficiently high profit margin. How high is high? I believe the initial gross margin should be between 30% and 50%, and as competition increases, it should be able to stabilize at 8% to 10%. That, in my view, is a thick snow track. Of course, there must be a logic behind why such a track is 'thick'—it must have high barriers, such as technological moats, the pace of scientific evolution, talent advantages, or supply chain integration. In short, it’s not something anyone can just cross over into or enter on a whim; there must be barriers. And I think the greatest barrier of all is time—the need for long-term technological accumulation. Any other resource can be bypassed or overtaken, but time is insurmountable, unless there is a major revolutionary shift in technology."

Old Jia’s words were like a beam of light, illuminating the hearts of everyone at the table. They listened intently, feeling the weight behind his words. Xiao Yongbing continued, "Let’s start with the 'long slope' issue. How do you judge that a track can last twenty or thirty years, and not be cut short overnight by a change in policy?"

Old Jia laughed. "Yongbing, you’ve been bitten by a snake, so now you fear every coil of rope. This 'long slope' concept is a question of industry life cycle. First is the issue of market capacity. I believe everyone here can judge that, right? You can estimate it using market data. The second, and most critical question, is whether that estimated market capacity could vanish overnight due to a policy shift. In China’s current unique period of transformation, some industries could indeed be shut down overnight. I don't think this is just a question of market capacity; it is a test of an entrepreneur’s political sensitivity and their sense of social responsibility."

Xiao Yongbing sat up straight, his expression intensifying. "Oh, you’re making it sound even more daunting. Be specific. Don’t beat around the bush," he urged.

Old Jia looked around and feigned mystery. "Political sensitivity means that the industry you are in must be politically aligned. What does that mean? According to the central government, it means having a 'people-oriented' nature. If your industry runs counter to the interests of the masses, it could be shut down at any moment. Take after-school tutoring, for instance. The market capacity was large enough, but its negative impact was fueling societal anxiety over education. This is detrimental to talent cultivation for China as a whole and risks leading our education system astray. Therefore, once the industry reached a certain scale, the state was bound to intervene and regulate it. It’s not just tutoring; the same applies to those online platforms that were selling groceries. It’s a matter of serving the people. You cannot, just because capital is involved, seize the livelihoods of the ordinary people at the bottom of society who rely on selling vegetables to survive. That is not conducive to social stability."

Xiao Yongbing nodded thoughtfully. "True, that seems to be the case. In that light, the elderly-care robot industry shouldn't have a problem with its 'people-oriented' nature."

Li Zhiheng chimed in, "I think Old Jia makes a lot of sense! First of all, the aging population is a massive headache for the government. It’s a social issue tied to stability, yet there are no easy solutions. If technological progress can significantly replace labor and solve the service needs of the elderly, the state will definitely support it strongly. As for market space, there’s no need to worry—our generation will all be retired in ten years. Just our '70s generation alone numbers 200 million. If we live to be eighty, Yongbing, your elderly-care robots could sustain a business for at least thirty years just serving us! Hahaha!"

Sister Mei added, "Exactly, and there’s the issue of emotional companionship. In the future, the elderly won't have their children by their sides. Beyond physical care, they need emotional interaction. Isn't that a huge market demand? And this demand comes directly from C-end customers."

Old Jia nodded in agreement. "Exactly. So, I believe the elderly-care robot track you’ve identified, Yongbing, is indeed a 'long slope, thick snow' track. First, it is politically aligned and 'people-oriented,' the industry life cycle is long, and the market capacity is huge. Second, its profit margins should be high because hardware costs will continue to drop, while the evolution and upgrades of AI software are limitless. Constant software updates require the accumulation of massive user data—that is the technological barrier and your core digital asset, the most profitable asset of the future. The real profit in the future will come from software; the hardware will essentially be given away. For example, with Sister Mei’s games, as long as people recharge to play, she could give every player a high-performance computer, right?" Old Jia turned and looked at Sister Mei inquiringly.

Sister Mei said generously, "That’s no problem. The best computer right now only costs about 3,000 yuan. If you spend 10,000 yuan to play games on my platform, I’ll give you a 3,000-yuan computer to take home for free. If you're not satisfied, you can return it, and I’ll upgrade you to a better one. What’s there to lose? I guarantee you'll have fun. Once you start playing, you get addicted; if you can spend 10,000 yuan to play, you’ll keep playing and keep recharging."

Xiao Yongbing smirked with schadenfreude, "But Sister Mei, you’d better be careful whether your game has issues with being 'people-oriented.' Games are often called electronic opium that poisons the youth; that’s even more unethical than my education business fueling anxiety! If your games face a collective complaint from parents, you might be shut down overnight."

Sister Mei exhaled a ring of cigarette smoke with a long sigh. "Sigh, our industry lives on a knife's edge; that is indeed a problem. Hearing Old Jia’s words today, I seem to understand the severity of this issue even more. I really need to think about how to address the 'people-oriented' aspect of my games."

The atmosphere at the table grew heavy again. Everyone was reflecting on their own future and the future of their industries. Old Jia watched them, a sense of inexplicable responsibility welling up in his heart. He knew that each person's choice concerned not just their own fate, but the development of society as a whole. In truth, was this not also a question of the 'people-oriented' nature of those working in finance?