Wang Xing the 'Deep Thinker': The Business Philosophy of a 'Reading Machine' and a Believer in 'First Principles'

Prologue: A CEO Unlike a CEO

Among China's entrepreneurs, Wang Xing is an "outlier."

He is not a gifted speaker; in fact, he can be somewhat "awkward" and "shy" when facing the media. He doesn't network and almost never attends the lavish "tycoon dinners." His personal life is as simple as a "programmer's," his greatest hobbies being "reading" and "thinking."

If you look at his Fanfou (after it was restored), you'll find it's less like the "microblog" of a CEO of a hundred-billion-dollar company and more like a "scholar's" study. It's filled with his excerpts from "One Hundred Years of Solitude," his thoughts on the "law of entropy," and his analysis of the rise and fall of the "Roman Empire."

He seems to have no interest in the "power plays" and "networking" of the business world. He is more like a "scientist," trying to understand this complex business world from its most fundamental "laws" and "principles."

This unique "scholarly" temperament has become the core "soft power" of Wang Xing and Meituan.

Act I: The Secrets in the "Reading List"

"A CEO's ceiling is the company's ceiling," Wang Xing once said. And his way of raising his own "ceiling" is through "reading."

The breadth and depth of Wang Xing's reading are well-known among Chinese entrepreneurs. From Jack Welch's "Winning" to Andy Grove's "Only the Paranoid Survive," and Ben Horowitz's "The Hard Thing About Hard Things," he is well-versed in almost all the classics of business management.

But the books that have influenced him the most are those from "other fields."

From "Finite and Infinite Games," he learned the philosophy of "boundless" expansion. From "Antifragile," he learned how to build a more resilient organization in an uncertain market environment. From "Guns, Germs, and Steel," he learned how geography and environment determine the fate of a civilization and applied it to analyzing the O2O competitive landscape in different cities.

This knowledge, seemingly "unrelated" to "business," has provided Wang Xing with a grander, more fundamental "thinking framework."

While his competitors were still agonizing over "how to meet this quarter's KPIs," Wang Xing was contemplating, "What kind of company will Meituan be in a hundred years?"

This dimensional difference in "cognition" ultimately determined the outcome of the war.

Act II: A Believer in "First Principles"

If "reading" is Wang Xing's "input" method for acquiring information, then "first principles" is his "CPU" for processing it.

Wang Xing is a most faithful believer and practitioner of "first principles."

The so-called "first principle" is to return to the essence of things, to deduce and judge from the most basic "axioms," rather than being bound by "experience" or "analogy."

We can see this way of thinking in every major strategic decision Meituan has made.

When everyone thought the essence of "group buying" was "discounts" and "marketing," Wang Xing returned to first principles: group buying, in essence, is about helping merchants improve their "operational efficiency." Therefore, Meituan should not just be a seller of "traffic," but should go deep into the downstream of the industry to empower merchants with technology and data.

When everyone thought the essence of "food delivery" was "traffic" and "subsidies," Wang Xing once again returned to first principles: food delivery, in essence, is a "logistics" business. Therefore, the key to winning the war is not who has higher subsidies, but whose "delivery network" is the most efficient and has the lowest cost.

This habit of constantly "questioning the essence" allows Wang Xing to always grasp the most core, decisive "winning move" in a complex and noisy market.

Epilogue: Cognition is the Only Moat

"I have always believed that all problems, in the final analysis, are problems of cognition."

Wang Xing's success is the best proof of this sentence.

In the Thousand Groupon War, he recognized earlier than his competitors that "efficiency" was more important than "scale."

In the food delivery war, he understood more profoundly than his competitors that "offline" was more important than "online."

In the boundless expansion, he saw more clearly than his competitors that the "core" was more important than the "boundary."

Through his two decades of entrepreneurship, he has shown us the power of a "thinker."

In this rapidly changing era, any advantage in a business model can be imitated and surpassed in a short time. Market share, traffic, capital... these may only be "temporary" moats.

The only truly lasting "moat" that cannot be easily replicated is the depth of "cognition" of an entrepreneur and the organization they lead.

The way you see the world ultimately determines how big your world is.