Zuo Hui’s destiny

Zuo Hui's destiny

On Monday, May 24, the memorial service for Zuo Hui, the founder of Shell House, Chain Home and Ziyou, was held at Beijing’s Babaoshan Mountain. More than 20 buses were parked outside the gate and more than 1,000 people, including Zuo Hui’s family, employees, investors and friends, were present. People dressed in black, wearing white flowers on their chests and holding a bunch of light chrysanthemums, silently sent the entrepreneur on his last journey.

Zuo Hui’s wife delivered a eulogy. She said that Zuo Hui had been ill for eight years and knew that she did not have enough time, so she did more layout for the company earlier and also spent the rest of her time with her family. Some people began to wipe their tears.

A person close to Zuo Hui said that his cancer had spread to other parts of the body in the past few years. After the Spring Festival this year, his condition deteriorated sharply. But except for his family, no one else knew about it, including the board of directors. Zuo Hui still responds to messages from friends in a timely manner, and has also been interviewed by CCTV during the period.

Zuo Hui has long left his career in the hands of trusted people. According to our understanding, since at least 2018, Shell CEO Peng Yongdong (Stanley) has completely taken over the real estate brokerage platform Shell (also including Chain Home and De You). The long-lease apartment brand Ziyou and the asset management company Vision Group, on the other hand, are headed by Xiong Lin and Tao Hongbing, respectively. The day after the memorial service, Shell issued an announcement saying that Peng Yongdong succeeded Zuo Hui as the chairman of Shell, while calling Zuo Hui “the honorary chairman forever”.

Zuo Hui’s death triggered the fierce expression of two emotions. On one side was endless nostalgia and praise from entrepreneurs, real estate brokerage practitioners, industry observers, and even competitors from different fields. On the other side is criticism and even cheering, with people blaming Zuo Hui, and the company he created, the highest market capitalization in the real estate industry, for the injustices they have experienced in renting, buying and selling homes.

In 2018, Zuo Hui had already anticipated the controversy he would face after the company’s nationwide reach. We had a long talk with Zuo Hui at the time, and he said he never felt that society was unfair to Chain Home, because any platform that grows bigger will be subject to more scrutiny and scrutiny, and will inevitably be subject to more demands.

Today, almost all of China’s most successful Internet companies and their founders are under fire. This generation of entrepreneurs, represented by Zuo Hui, has seized the opportunity of the times to build business giants that have reshaped the consumption of hundreds of millions of people. In more optimistic times, they were held up as role models. And now, because of where they are, they will also take on some responsibilities that may not have previously been taken on by entrepreneurs.

Missions are all about getting bigger in the process of doing things

What Zuo Hui left behind is the largest real estate trading platform in China. The Chinese bought and sold about 25 trillion yuan of property in 2020. One in four of those second-hand homes were traded through Shell. One-third of new homes sold through agents go through Shell.

Shell has successfully standardized the real estate transaction process, helping practitioners to sell properties more efficiently. Last year, each of the 500,000 real estate agents on the Shell platform sold an average of more than 7 million yuan of properties, about twice the industry level. This change was reported in detail by LatePost when Shell went public.

Countless Internet companies have tried and failed to build similar trading platforms in the real estate market. Zhang Yiming, founder of Bytespring, and Wang Huiwen, co-founder of Meituan, were among those who tried.

Entrepreneurs attribute Zuo Hui’s business success to mission-driven business.

When doing a company-wide speech six months ago, Zhang Yiming, founder of Byte Jump, recalled as a user and former CEO of the real estate information website Ninety Nine Rooms that he came to Beijing in 2005 and felt that the quality of agency services was poor at the time, with some bordering on rogue, but he was impressed that Chain Home did not chase immediate profits and made long-term investments. Zhang Yiming believes this is because Chain Home, and later Shell’s organizational operations, have a very strong pursuit of the company mission of “dignified service providers and better living.

Tencent founder Ma Huateng said he visited Chain Home’s headquarters during the announcement of Tencent’s strategic changes in 2018. Zuo Hui led Chain Home from offline to online, transforming a huge industry without being disrupted by the Internet, which inspired him a lot.

The increased efficiency has allowed an industry that was once rampant with pitfalls, mutual hostility and even brawls to gradually establish professional dignity and provide decent income and room for growth for its practitioners. Shell gave each real estate agent an average commission of nearly 100,000 yuan in 2020, several times the per capita share of taxi and take-out platform practitioners.

Rivals also paid tribute after Zuo Hui’s passing. Shi Yongqing, founder of Centaline Property, said in an interview, “Zuo Hui was an admirable person who pushed the industry forward. I believe he did this not to make money, but to make some contribution to this society to the industry.” In 2015, Chain Home surpassed Zhongyuan Real Estate in the number of stores to become China’s largest real estate brokerage, and then stormed its hinterland of Shenzhen. Centaline has so far refused to access the Shell platform.

Peng Yongdong, who took over the chairmanship of Shell, said in a 2020 interview with LatePost, “The mission is actually all in the process of doing things on your own and getting bigger.”

Peng Yongdong remembers that since he met Zuo Hui in 2008, Zuo Hui’s perspective on this business has not changed much since the beginning. But in the past decade or so, Zuo Hui’s scope of concern has become larger and larger, from his initial concern for Chain Home as an organization to his later concern for the entire industry, and his sense of mission has gradually become larger.

Chunlin is an employee who joined Chain Home in 2011. Before that, he followed Zuo Hui’s microblog because he was looking for a job. At that time, Zuo Hui’s microblog was frequently posted, often sharing little things about his life, interacting with his colleagues and talking about some business reasons. “Old Zuo (microblogging) spoke a lot of ideas and concepts, I agree with him very much, I was very infected and inspired. “When seeing the news of Zuo Hui’s death on his cell phone, Chunlin’s first reaction was ‘Impossible’, followed by sadness, ‘A good man, gone’.”

Chunlin remembers that Zuo Hui always had a very fine heart. For example, at that time in the headquarters of Kuntai, the person doing cleaning often pushed a chair with garbage and other things on it. Zuo Hui saw it, felt bad, and re-made a trolley with various functions.

After Zuo Hui’s death, old colleagues of Chunlin were spinning the video of Zuo Hui’s “I have a dream” speech with reference to Martin Luther King.

That was the speech Zuo Hui made in front of all the store managers of Chain Home at the Beijing Agricultural Exhibition Center on July 19, 2011: “I have a dream that one day, ordinary Chinese people will be able to buy a second home from Chain Home with ease and pleasure ……I have a dream that one day all Chain Home agents will be treated with the dignity and respect they deserve ……I have a dream that one day my two children, who are still breastfeeding, will grow up and be able to point to the green storefront his father works for and be proud of it! …… These dreams are not that great, we were just born in a great country and work in a great industry. I always thought, “If the chain doesn’t do these things, who can?”

Chunlin remembers that the real estate brokerage industry was much worse back then than it is now. He was responsible for running the account, going to Weibo and searching for “chain house” and leaving comments when he saw them, but every time he opened Weibo he was inundated with curses. Once, a writer made Zuo Hui’s phone number public on Weibo because he resented the agent’s phone harassment. Chunlin saw in Zuo Hui’s office, his two cell phones, the phone kept ringing. There were also people who came to the company to hold banners.

Zuo Hui likes to observe and always describes some scenes with a sense of picture in the interview. He can see from countless details that the service level of this industry is not high, the consumers are not satisfied and the practitioners are not respected.

Going to real estate exchanges in different cities, he felt that people were in the wrong state inside the exchanges. It should be a happy thing to buy or sell a house, but people in the exchange looked a bit anxious, “Why does it have to be like this? It doesn’t have to be like this, right? So I would think, we can go do something, these things are ordinary, but I think it’s pretty great.”

Real estate brokers are a factor that makes it difficult for consumers, such as brokers eating the difference and using threats. Zuo Hui said he does not want to stratify people, nor does he feel that the industry is mixed, “I think we are all ordinary people, of course, inside this industry, there are a lot of bad eggs, I myself will first think, why are they so bad eggs? Could it be that there is something they have to do?”

Before founding Chain Home, he was a student of Beijing University of Chemical Technology, and after graduation, he worked in the information industry and founded an insurance agency. “When I first started to work in this industry, I didn’t really understand the state of life of the most common agents.”

Once driving through an urban village in Haidian (now demolished), Zuo Hui saw a lot of real estate agents with work signs. He didn’t expect the agents to live in that kind of place before, so he approached them for a chat. “They were very normal and kind, similar to most of the people I met around me. Although the living conditions are not very good, but I also do not see a worse spirit, (they) is the state of young people inside a city, to struggle, to work hard.”

When interviewed, Zuo Hui never used the word “agent”, he would use “agent”, or broker, because the word “agent” is not good.

The shift from the long-term development of Chain Home to the establishment of an open platform and the transformation of the entire industry occurred mainly after Zuo Hui fell ill.

In 2015, the online real estate brokerage platform Aiya and Wu burned money to expand, saying they wanted to use the Internet’s “airplane cannon” to subvert the “slash and burn” of traditional real estate agents.

Lu Hang, president of 21st Century Real Estate China, remembers that there was communication between the industry and the leaders of the Ministry of Construction and several Internet giants, “At that time, intermediaries could only survive by desperately opening stores, and everyone was suffering,” Lu Hang said, “Everyone wanted to establish a cooperation mechanism, but felt a bit idealistic , no one is willing to do this.”

Lu Hang believes that to do the industry platform, first of all, the company needs to have its own resources, dare to sacrifice, in order to attract others to join. Secondly it also has to have a big vision. He felt that no one was better suited to do this than Chain Home, and discussed it with Zuo Hui at the time, but Zuo Hui had been waiting for a suitable time.

February 23, 2016. Two home purchase cases represented by Chain Home were criticized by the Shanghai Consumer Protection Commission, accusing Chain Home of failing to do its duty to investigate property rights, leading to financial risks after payment by home buyers. At that time, Zuo Hui went to Shanghai and summoned the regional directors to give a three-hour speech, expressing his hatred and disappointment with the industry – he hated the hierarchy, he hated the cheating, and he hated the brokers for not growing up.

Peng Yongdong said that it was also the most painful time for him at that time, he had been coming to Chain Home for 6 years, but he was still treated as a bad guy by many people, “taking three steps forward and two steps back”. He felt that after the “2.23 incident”, the scope of Zuo Hui’s concern obviously expanded from Chain Home to the whole industry.

A year later, Chain Home began a pilot project in Zhengzhou, opening up its internal management system for third-party use, which eventually evolved into Shell.

This is their business, not Zuo Hui’s

In April 2014, Chunlin and his colleagues moved from the Kuntai headquarters to the new Silicon Valley of Link. Peng Yongdong formally started to do the chain of command there. After that, Chunlin rarely saw Zuo Hui in the office.

Hu Jinghui, the former vice president of my home, once told us that he felt that since Zuo Hui fell ill in 2013, he had become more hands-off and empowered in specific internal management. Zuo Hui is no longer as hardworking as before, and his life has become more transparent. Investors in Chain Store said that Zuo Hui’s illness may have affected him in that he will be more focused and more aware of what matters most to him.

The above-mentioned shell managers said that Peng Yongdong has completely taken over Shell (including Chain Home and De You) since at least 2018. Peng Yongdong is not only in charge of Shell, the largest Internet platform, but also leads Chain Home, the largest real estate brokerage, including all its stores and 140,000 agents.

In an interview with Li Xiang, a veteran media personality and editor-in-chief of the Get app in 2020, Zuo Hui said clearly that there was no longer any division of labor between him and Peng Yongdong, “basically it’s all him, no need to divide it.” He repeated twice, saying that his core thing to do is to let Peng Yongdong know as soon as possible that this is his own business.

Zuo Hui has set a successor for all his business. Shell was given to Peng Yongdong. Ziyu is in charge of CEO Xiong Lin, and Zuo Hui repeated what he said about shells, “I realized one thing early on, Ziyu is Xiong Lin’s business, not Zuo Hui’s.” The third is Vision Group.

Peng Yongdong, Xiong Lin and the CEO of the management company Vision Group, Cang Zijian are not from the real estate industry background, but from the IBM consulting team hired by Chain Home back then. Zuo Hui said he picked the CEO mainly on three points. The first is the ability to think abstractly. The second is to be tough, because business is very cruel. The third is to have a pattern, beyond their own position to see the problem, so that we can work together back to back, “the matter to you, is your matter.

He said the first level of abstraction ability will sieve a lot of people, “want to sell a good house is easy, but good at ‘one person one room one customer’ is not enough, we (do platform) to be good at ‘ten thousand people ten thousand rooms ten thousand customers’. We do the house business, we need to abstract the city, abstract each person, abstract each role, abstract the organization, abstract the matching relationship, all these may need abstraction ability.”

A shell manager said that Peng Yongdong and Zuo Hui are more and more alike, “both are absolutely rational and extremely emotional, they often take a microscopic individual as a tangent, are highly moved by a microscopic picture, and then abstract it.” He believes that Peng Yongdong already has the ability to mobilize the whole team, which is tense and united after Zuo Hui’s death.

Another shell executive said he admired Peng Yongdong, “At the time I saw Stanley, I thought Lao Zuo chose Stanley as CEO, (because) Stanley was also a very good at thinking deeply and could pull out the phenomenon to see the kernel.”

In April 2018, Peng Yongdong released an open letter announcing the launch of “Shell Finder”. One month after the pilot, Peng Yongdong called all of Chain Home’s city general managers to the Fudao Building and gave them a day to choose whether to continue at Chain Home or join Shell. One day later, Chain Home mobilized nearly 20,000 people to Shell.

The launch of Shell was the fifth year of Zuo Hui’s illness, and the launch seemed a bit anxious. Lu Hang said that when 21st Century Real Estate accessed Shell, “the first six months were ‘a mess,’ but after that it was better than I thought it would be at best.” Last year, 21st Century Real Estate saw a 70 percent growth rate.

As Shell matured, Zuo Hui’s career was gradually handed over to his successor. And that career has truly changed from building a successful company to transforming an industry.

The destiny of a generation

The comment section on the news of Zuo Hui’s death gathered fierce emotions. In the narrative of the bashers, Zuo Hui represented not only Shell, Chain Home and Ziru, but also the bad agency industry. He was not only responsible for the formaldehyde rooms of Ziru, but also for the eggshell thunderstorm. Not only did he charge excessive commissions, but he also drove up housing prices.

A generation has its own destiny. Zuo Hui’s success and the questions he encounters today are largely within that destiny.

In interviews, he often mentions “our generation”. He feels that this generation of entrepreneurs who grew up along with the reform and opening up have a destiny: they want to create something, change something and take some responsibility. In his own case, it is “to enable Chinese people to get a basic guarantee for house-related consumption, service and experience”.

This generation of entrepreneurs is also indeed fortunate to have caught up with the continued economic opening of a country and the shaping of one of the largest markets in the world. Especially after the popularity of the Internet, communication, payment, online shopping, takeaway, real estate, taxi …… each big market, after white-hot competition, was born a platform company covering the whole country.

They seized the opportunity to build the infrastructure to secure consumption for 1.4 billion people from scratch, improving everyone’s consumption experience and enhancing the operational efficiency and competitiveness of the entire economy, and were fully rewarded for doing so. The free market advocated by Friedman has been put into practice here in the most extreme way.

However, when the agency stores all change their dark blue signs, the riders all put on egg-yellow uniforms, and the drivers all install the same taxi-hailing software, the originally scattered and blurred image of small and medium-sized enterprises and self-employed people are collected in one big platform. The public has a clear target to blame when problems arise – mega-corporations with market capitalizations in the hundreds of billions of yuan, and the wealthy founders who lead them.

There are few more acute conflicts in China than housing. Some of the irregularities in real estate transactions and excessive formaldehyde standards are indeed the responsibility of Shell or Ziyou. But there are other problems, such as rising housing prices, that are hard to blame on a single company. It’s just that the invisible hand behind the market, the one-city-one-policy regulation means, or the “rigid bubble” summarized by economists are too abstract concepts.

Zuo Hui already expected the attack. Three years ago, facing the accusation that Chain Home was alone, he said there was nothing unfair about it, “After any trading platform gets bigger, it will be subject to more supervision and interrogation and face more demands.”

As companies get bigger, the scale effect also hinders the entry of new rivals, and change becomes an opportunity that only the lucky ones of the previous generation mastered. Technological advances and market openings have given this generation of entrepreneurs the opportunity to reach previously unimaginable levels of influence, and they have been given responsibilities and demands that were not previously undertaken by entrepreneurs.

A few months ago, Zuo Hui told Li Xiang that the accusations against big Internet platforms today are ultimately a matter of organizational legitimacy: “What kind of value does your organization have besides creating GDP and jobs? This is the process that can ultimately complete the legitimacy.”

When he was alive, Zuo Hui spent 20 years completing his mission, improving the efficiency and experience of an industry and providing more dignified work opportunities for hundreds of thousands of people. This was his destiny.

After he passed away, he himself and the company he founded still had to take up more and more of the demands.

This is also his destiny.

(Chunlin is a pseudonym in the article)

Reporter Gong Fangyi also contributed to this article

This article is from WeChat public number: LatePost (ID: postlate), author: Lai Shiyun

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/zuo-huis-destiny/
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