Opportunities never disappear, they just move elsewhere | Brother Dong's Notes

Source: Dongge Notes

Author: Li Chengdong

Dongge Notes Issue 210:

I often hear friends around me say that young people today have fewer and fewer opportunities. What does Dongge think? Traditional opportunities are decreasing, but new opportunities are increasing.

The number of opportunities depends on the size of the total market. If we only target the market of 1.4 billion people, incremental opportunities are indeed fewer. But if we embrace the global market of 8 billion people, there are plenty of incremental opportunities.

Every generation of Chinese people has its own opportunities!

Beyond all consensus zones lies the blue ocean

Over the weekend, two groups of friends from the Dolphin Society came to Beijing for tea and dinner, and to discuss some collaborations. One is an entrepreneur in Africa, making $200-300 million a year, and another is making $1 billion!

Fortune favors the bold, but Africa and Russia may not be as dangerous as people think. It's normal for ordinary people to have stereotypical thinking, but entrepreneurs must avoid it and learn to think differently.

Of course, there's also survivor bias—these two are exceptional!

Control the pace, survival comes first

Dongge visited Langfang, Hebei, where a founder I previously backed is starting his second venture. His first venture cost him several Beijing properties and led to a broken family.

Fortunately, after the properties were auctioned, he paid off his debts and had some left. He started a new project, which was also a direction we suggested.

It's been just over a year now, and he's making a net profit of 50,000-60,000 yuan a month. He wants to replicate and expand the current model. His current partners, all from his hometown, are making 20,000-30,000 yuan a month. He's considering recruiting franchisees after the Spring Festival to scale quickly.

I advised him against this idea because his first venture failed due to moving too fast. This time, he needs to control the pace. The most important thing is that few people can afford to invest 200,000-300,000 yuan and still be willing to do "hard labor."

I suggested he offer incentives to his current partners (monthly commissions) and have them reach out to their networks. I know how hard it is to make money now—ride-hailing drivers in Beijing and Shanghai earn an average of 8,000-9,000 yuan. In third- and fourth-tier cities, it's around 4,000-5,000 yuan, and you have to work very hard. It's even tougher than his current model. Food delivery riders earn about the same.

I believe he can attract enough partners who are willing to follow him in this venture.

Small fortunes depend on skill, big fortunes depend on fate/luck

1) How to raise money when starting a business with no capital?

Many entrepreneurs who contact me are willing to give equity instead of cash, usually hoping I can introduce them to investors. In terms of investor connections, I do have a rich network, especially in the consumer and internet sectors. My Dolphin Society has over 300 partners from top-tier venture capital firms, all well-known names.

2) So, how can entrepreneurs raise money at this point in time?

Before 2021, when the venture capital market was still active, you could raise funds with a good story or connections.
The problem is that now, consumer sector investments have shrunk by 95%. Investors in consumer goods have shifted to hard tech/AI/embodied robots/semiconductors. Angel rounds for consumer projects are gone—no one invests in pure stories anymore.

Recently, I spoke with a friend who's a senior investment executive at a major company. This year, they're focusing mainly on AI/embodied robots and ignoring consumer goods!

This massive contraction is understandable. Market principles dictate that the IPO pipeline for consumer goods in the A-share market is blocked. Investors who previously backed consumer projects are now paying the price. That's why the Dolphin Society's consumer goods conference, held two or three times, was discontinued three years ago. It takes two to tango—no matter how enthusiastic entrepreneurs are, investors aren't interested now. This shows how much policy impacts the microeconomy.

If investors can't exit, they can't raise new funds. With no money, brand owners become cautious, hiring slows, fewer people start businesses, job opportunities shrink, and salary increases become rare.

Of course, it's not that no one invests at all—only in exceptionally attractive projects. Recently, I helped a consumer brand I previously backed secure pre-IPO cornerstone investors. They're already making hundreds of millions in net profit with annual doubling growth. They don't need money but need supporters. Such highly certain projects still attract investor interest.

3) How can ordinary entrepreneurs raise money?

First, you need to make some money yourself, then raise funds from parents and friends.

Second, once you're making 700,000-800,000 yuan in monthly revenue, raise funds from upstream and downstream partners. Most transactions now require payment upfront—everyone's afraid of defaults. That's why starting a business is so hard now—social credit has collapsed. Even government projects may not get paid, let alone small and medium enterprises. Credit terms are gone.

So, if you're making 700,000-800,000 yuan a month, you can ask suppliers for payment terms, effectively raising 200,000-300,000 yuan. Downstream partners can also be flexible. If they can make 50,000-60,000 yuan a month from you, raising 300,000-400,000 yuan is possible.

With 500,000-600,000 yuan, you can double your business needs while keeping risks relatively controlled.

4) Asset progression: How to make "idle money" your partner?

At 2 million yuan monthly revenue (200,000 yuan profit), you can seek external financing. Even at this level, venture capital still won't be interested—it's not a "sexy" business. But China's household savings balance is 161 trillion yuan, mostly held by the wealthy with few investment opportunities. Large deposits yield less than 2%.

If you're making 200,000 yuan a month (2.4 million yuan annually), raising 3 million yuan isn't a problem—no one fears you'll run off with the money. Financing partnerships are a mature model. Investors get high dividends early, with principal repaid first, then lower rates later. It's not a bank loan—no collateral is needed.

After this, do you still need venture capital? Making a few million a year is just an ordinary business—no investor will care. At this point, I believe consumer projects with less than 100 million yuan in profit won't attract venture capital.

Once sales exceed 100 million yuan and profits reach tens of millions, founders must evolve, and so must the business model.

This is when you need a new story—a second curve. Then, venture capital might show interest. Small fortunes depend on skill, big fortunes depend on fate/luck! But first, you have to survive!

How to make one decision that impacts twenty years?

The shortcut to success is figuring things out early to avoid detours.

So, what are the most important things in life? Which decisions matter most? Which key decisions can't be made lightly? We spend enormous effort on degrees and certifications, but these aren't life's only important decisions.

Dongge believes the most critical decisions include, but aren't limited to, the following.

First, choosing where to work—big waters have big fish. Thirty or forty years ago, urban and rural life was worlds apart, so everyone moved to cities. Now that everyone's urbanized, the key question is which city to work in after graduation—salaries for the same role can differ by 100%. Some cities thrive on emerging industries, others decline on old economies. Your city choice also determines whether your property retains or grows in value.

Second, choosing an industry and company. I studied financial management with a minor in finance at a decently ranked university. After graduation, I chose to "drift north" and entered e-commerce. I started as an editor at a small e-commerce forum, unrelated to my major. A year and a half later, I joined Tencent's e-commerce division for strategic investment analysis, then JD.com's strategy department. E-commerce was a rising industry, so I quickly built influence. Beyond personal traits and hard work, it was mostly "in the land of the blind, the one-eyed man is king." I appeared on CCTV early, interviewed Jack Ma, Richard Liu, Long Yongtu, and others, and was featured in The New York Times, Wall Street Journal, Financial Times, Bloomberg, Reuters, and other top global financial media.

Choosing the right industry lets you grow rapidly with the sector and company, boosting income and connections quickly—you might even become a key industry figure.

From my experience, your major doesn't dictate your career. Whether starting a business or entering the workforce, avoid rigid thinking. The key is post-entry learning agility—can you become an expert quickly? A "lie flat" mindset leads nowhere.

Third, choosing a life partner—important for both genders, but more so for women. Elite society remains male-dominated, so women who choose well can achieve twice the results with half the effort. Many "independent woman" bloggers don't understand societal realities. For men aiming high, a partner who drags you down makes breakthroughs hard. Careers and business demand full effort—a supportive partner is crucial. But many women are immature and quarrelsome, resenting childbirth, chores, and childcare. Such women aren't smart. Marry wisely.

Fourth, investment and financial planning. China's real estate downturn over the past three to four years saw nationwide price drops of 30-60%. Anyone who bought in the last seven or eight years lost money. Major investments require caution. Think deeply about which investments can outlast cycles with data-backed value retention.

I once tweeted: From 2004-2024, the CSI 300 index returned 7.1% annually compounded. Reinvesting dividends raised it to 9.05%. If you invest 20,000 yuan annually from age 22 to 60 at 9.05%, you'd have 5.726 million yuan. (This isn't investment advice—investing carries risks.)

For any ordinary professional, this is a fortune. With retirement pay, it ensures a comfortable life. CSI 300 index investing far outperforms property for value retention. Given China's construction quality, real estate as an asset class is questionable. Most people invest blindly, swayed by online "scam influencers."

Those who avoid deep thought, especially on key decisions, doom themselves to detours.

Dongge's closing note: Create exchangeable value

Capital values human worth—hence the recent $1 trillion reward proposal for Elon Musk. If you create outsized value, capital will pay handsomely.

Capitalists don't exploit you—it's labor market dynamics. Your income depends on ability and labor supply.

If labor oversupply persists, wages won't rise. Only in an active entrepreneurial market is your value fairly reflected—or even at a premium.