Make Dreams Come True


HUANG Xiaojie, founding partner of JD Capital and General Manager of Tongchuangjiuding Management Co., Ltd. (JD Group). This is an excerpt from his speech delivered at JD Capital’s 2011 Annual Meeting.

I still would like to talk about our fundamental views on the companies, the world and the life. If we share the same value, then we shall definitely conquer all. 

First, we need to have a clear picture of where we are now and where we will be

Are we already at the top of China’s PE sector? Sure, we topped the Zero2IPO PE rankings last year. But we are not yet the No.1 in China’s PE industry. After all these years of efforts, JD Capital has grown into an excellent PE company. However, we need to be well aware that we still have a long road ahead.

Are we still a start-up company?

JD Capital is more of an entrepreneur than an investor, who is always on its way. We continuously make improvement whenever needed while chasing after our dreams. It is because we are at the start-up period that we have our dream, pursuit, goal and future. Despite long-term adjustment and fluctuation, mediocre income, poor treatment and heavy workload, it is our hard work and concerted efforts that got us here. I really appreciate it. In a long period to come, we shall still be at such a period, and I hope we can continue to head forward with a humble mind. 

What should we do when someday we finally climb to the top of China’s PE sector? What should we do if we feel like we have earned it when called the No.1? What should we do when merited with attention from the whole sector, with extreme respect from all peer institutions, and with their sincere admiration for such an honor?

Well, I believe then we need to answer some questions. Can we stay ahead for long? Is it just because we’ve got lucky? From the perspective of world economy, being No.1 in China’s PE industry is nothing to brag about as the global stage is way larger. In China, the RMB 50 billion capital would make a PE firm a solid leader in the PE industry. However, the size of many PE institutions in the US is over USD 100 billion. TPG (Texas Pacific Group), which started its business in 1993, is now managing over USD 100 billion. How far are we behind our global rivals? Let’s make dreams come true.

Over the course of human history, we, as a team, could always notch up some achievements if individuals all work together. However, what we have done is nothing compared to the moments that rewrote the history. Besides capability, we also need the chance. It sometimes takes several hundred years to make a dream come true. While we are tiny in human history, we still deserve to spare no efforts to realize each individual’s value. 

Second, we need to aim high.

Aiming high is our top value. When we just started this company and talked about our future direction in a small and shabby conference room, we did not dare to say the MOST competitive PE firm at first. However, we are now more than grateful to have this ambitious goal. 

After years of efforts, we are getting there bit by bit. Never can we become who we are today if we only wanted to be mediocre the day JD Capital was founded. 

Aiming high while keeping heads down. The ambition alone would make us ignore small things. We were almost broke when we established this company and certainly were not qualified to take charge of the world’s leading investment companies, e.g. Goldman Sachs or Morgan Stanley. Even compared with our peers in the domestic investment sector, we are not among the best.

When we had nothing but ambitious goal, we seized every chance to do things right. Without the hard efforts back then, our dream will always be the sweet dream.

Thinking wildly and acting humbly. To have the guts to fight does not necessarily mean we need to be arrogant. Sometimes I hear the saying that some of our staff feel like working in the best company. I appreciate it when you feel proud and have such confidence; however, it is a humble mind that leads to great success. 

To win a long-distance race. In 2012, we should make greater efforts in improving our internal process and management. In one’s lifetime, the verification of the investor’s investment ability entails several periods, and might only be completed when his natural life ends. It is the same with a firm. If we are not yet prepared for a long road ahead, we might as well give up on our dream. 

Third, we need to build a performance-based management system.

Would you think it is awkward to talk loud about our dream and the performance-based management system, or money, at the same time?

I don’t think so. In human history, the labor-based distribution has been the best distribution system. To provide more compensation to those working extra hard is the foundation of our incentive system. Similarly, one gets more if he works in places with poorer conditions. It might not be the most human-oriented and perfect system, but it is undoubtedly the most scientific so far. In our view, it is also the only available choice for a company to go far. 

We do not judge our employees simply by his or her performance. It is morality that matters most when we decide to employ a person. After being recruited, our employees would then be ranked based on capability. So you can be properly graded as long as you show your talent. The compensation is determined by your performance. All in all, we take people with moral behavior, promote those with talents and provide competitive compensations for solid performance.

According to the performance-based system, we should keep all those with great performance and let go of those with poor performance. It is what it takes for a commercial institution to survive. However, we also show respect to each of you who decided to join us. Hence, we would not care only about performance in the short term and are willing to help those who left. For instance, we’ve provided economic support for former staff living in difficulty, and given time and care to people with unsatisfactory short-term performance that allow them to learn and adjust. This demonstrates the dialectical unity between performance orientation and care for people.

What else do we pursue? In last years’ annual meeting, we talked about our long-term pursuit to build a marvelous team. In the thousand years of human history, companies only focusing on money could never survive long. So, we should have a bigger dream beyond pure benefit; otherwise, a major crisis could easily tear us apart.

Fourth, we need to understand the relationship between individuals and the team.

The individualistic heroism can hardly find its way into today’s society. Even the most independent artist is not able to become one of great influence if no one is around to serve him. Individuals and the team are interdependent: individuals must combine to exist in the real world, while the team also exists and develops based on individuals’ talents.

We are all an integral part of JD Capital. Meanwhile, we are also opponents, as we have our own needs and seek as many resources as possible (e.g. we all want more salaries for ourselves and fewer for others). It is, therefore, necessary to create a harmony between individuals and the team as a whole through our management.

Most importantly, we need to ensure that each individual could survive and the team exist. Even in the worst case scenario, each of us and his family should be able to live or else our team would turn out to be a serious failure. 

In the meantime, we need to ensure the team could exist. There would be no protection for individuals if the team no longer exists. Hence, we have made some adjustments to our incentive system, which I hope could be well understood by all of you. We are still in the start-up stage and we have lots to be improved. The only reason we made these adjustments is to let our team exist longer. 

What is our goal? We want to see progress made by both individuals and the team. This is what we have been doing over the past five years. 

Over past five years, each of us has learned about investment and became a master of investment. Our team has also grown from a small company into an excellent one in the sector. I am deeply grateful of our team. If it were not for JD Capital, I am probably still a civil servant. It is JD that gave me a chance to learn and change. I hope all of you could also show sincere gratitude after recalling what you have learned from JD Capital over the past few years. 

Looking ahead, we wish each individual to be free and happy, and our team to be great and long lasting.

Each individual’s freedom and happiness could contribute to a great and long lasting team. I used to believe in authority and the philosophy that one could sacrifice everything to achieve success. During my university time, I once wrote an article advocating success at the expense of others. I changed my mind over past years of experience. Especially last year, I welcomed a new birth and waved goodbye to the loss of a life, which gave me a different insight on my emotion and worldview.

The bottom line of achieving success at the cost of others’ life is that such success is meaningless. While making our own achievements, we also need to cherish life, as well as the opportunity for us to work together towards the same goal. We should try to understand others, respect others, share the honor with others, and never readily abandon each other in hard times. 

Fifth, when facing skepticism, we need to look back to our previous success. 

In the past year, we were challenged for rapid expansion. Some of them even waited for us to fall so they could make a laugh about it. Meanwhile, some showed care, gave us advice and reminded us of potential risks, for which we are deeply grateful. There have also been some doubts with no grounds. A review of all those great achievement in human history would justify the pace of our growth and show the absurdity of their skepticism.

How far can a company go?

I was once asked whether our company was too large. Instead, I told the story about JP Morgan’s conversation with Carnegie in 1990, also known as the War of the Century. Back then, Carnegie was the largest and the richest steel maker in the US. In 1990, Morgan reached out to Carnegie and said “Your company is doing well except for one problem”. When Carnegie desired to know what it was, Morgan answered: “The small size”. Carnegie was surprised. Morgan then said: “Could you imagine a company taking up over half of America’s steel output?”. 

On February 5, 1901, Carnegie and Morgan acquired some mines and companies, and set up US Steel, which produced 60%/30% of total steel output in the US/world during its peak times.

How fast can a company grow? Some criticized us for expanding too fast, but is that true? A company was founded In January 1977, launched its first product in April 1977, went public in December 1980 and got its name on the list of Fortune Global 500 in 1982. This company is Apple. It spent only five years in growing into a Top 500 company. Just alike, JD Capital came into being five years ago, yet we are still far from that honor.

How far can imagination go?

We never deny our big dream. Many doubt our dream to be too unrealistic, but is that true? In 1924, a small weighing machine company renamed itself as International Business Machine Company to boost morale. They were mocked at first. After decades of efforts, they have made it and are now known as IBM. In the past, we Chinese never went short of imagination. Nonetheless, today, many Chinese no longer have such imagination and get easily satisfied with the glass half full. We would rather go all out and accept the failure than live a half-full life. 

Sixth, we need to separate desire from dreams.

Is it desire or dream that motivates a person? My answer is both. While desire gets you started, it is your dream that gets you far. Our desire, be it physiological or vainglorious, can easily be met, but our dream is what accompanies us along the way.

Shavian once said that, a hungry man only has one thing to worry about while a comfy man has endless. A man with no dreams would suffer endless pain the minute he gets all his desires met. Who are we looking for? Ideally, he should have no much fortune and used to live a hard life, which can make him an able man. However, we’d prefer that he also had big dreams, since only when someone think big, can he keep struggling with us. 

What is the difference between desire and dream? Here’s a simple way to tell them apart: a desire is always about yourself while a dream usually involves something bigger than yourself. I would like to quote LIANG Shuming’s words, a man I sincerely admire. He said: Real dream comes from the bottom of your heart.

By saying this, he meant to transcend himself. His lifetime dream was to devote himself to the nation and become a trustworthy person for the society. Today, very few Chinese people still talk about sacrificing for the society, the country or the nation. However, I hope we, as JD people, could also think for the long-term national development through sticking to our dreams and our responsibilities when we seek to meet our own desire. Only in this way can we go far.

Seventh, let’s make our dreams come true.

To make dreams come true is what makes life beautiful. 

As a matter of fact, you have three choices to make it big in China. The first choice is to become an official. Many people became one to make his ancestors proud while some were even reduced to making a fortune. However, a civil servant could also have his own dream. It is “to rebuild the value system, to stand up for people’s wellbeing, to pass on great minds and to safeguard everlasting peace”. This dream is not just about making one’s ancestors proud.

The second choice is to set down to an academic road. We could do some research, write some articles and spread some social ideas. However, most of them chose to stay in schools so as to separate themselves from the society. Also, some throw their dream away just to earn a living or even mislead their students in the class. In fact, a scholar could also have his own dream. As SIMA qian said in Shih Chi: “To investigate the relationship of Heaven and Man and to understand the change from the Past to the Present”.

The third option is to start a business. What do businessmen do? Most businessmen in China concentrate on making profits, with no pursuit of industrial development. This is tragic for one with real business pursuit.

As far as I’m concerned, to do business is to improve yourself. BAI Gui once said that, to make a successful business, one has to have the wisdom to adjust to changes, the reputation to keep his words and the courage to make an emergent decision. When doing business or investing, one can always improve himself if he could stick to these rules. A company, when making profits, should also seek to enhance the social efficiency as well as the welfare of our country and people. The ancients used to say that: “One’s utmost goal is to fight for the nation and people”. In the global competition, the rise of Chinese companies cannot be reached without the rise of private companies. It is more than meaningful and valuable to have such commercial pursuit and to undertake such a historic responsibility and strive for it for our entire life. Bill & Melinda Gates Foundation’s goal is to bring equal education and medical care to the world, which is set on a high vision. If we have such forward-thinking insight, we could by all means stay clear of a frustrating and meaningless life.

Lastly, I would like to share two phrases. The first is from ZHANG Jian, engraved on the monument in front of his reading room in Wuxi City, Jiangsu Province: “What separates a man from other lives and makes his life last is what he has achieved”. 

The second is from Czech’s Former President Havel’s New Year Speech in 1990, “Human beings are not only the creature of this physical world, but also could associate themselves with things at a higher level, though it is being gradually distracted by such a world”.

I hope that, in this cold and realistic world, we could all stick to our dreams and make them come true. It will always inspire us on our road ahead. 

I have such a faith, and I hope you do too. Thank you all.