TTPPRC: The Chinese Business Analysis Framework

100% Originally from China

Translated from here

Intro

Business schools typically divide commercial courses into accounting and finance, strategy and marketing, operations and management. These form the elements of business activities, and successful enterprises must excel in every aspect. However, for outsiders trying to understand a company's direct market performance using this classification method can be extremely difficult. Whether it's the SWOT analysis that must appear at the front of every business plan, or Porter's Five Forces that every MBA must read, they all have their own rigorous logic that ultimately becomes generational classics.

Unfortunately, after leaving school and no longer needing to write papers or make PowerPoints, I discovered that when I simply wanted to know why 郭敬明 (Guo Jingming)'s movies could achieve several times higher box office than 冯小刚 (Feng Xiaogang)'s, or why 海底捞 (Haidilao) is packed while more authentic Sichuan hotpot restaurants sit empty, these classic theories from textbooks don't provide much more thinking assistance than "郭敬明 (Guo Jingming) is good at marketing" or "海底捞 (Haidilao) has good service."

They're like telling naive young men that to get a beautiful girlfriend, you should be sincere, kind, work hard, and be gentle and considerate - too far from results and too impractical. Until later, I encountered a book that directly established my business thinking approach but wasn't quite suitable for putting on bookshelves and recommending to everyone. It was called "The Mystery Method"...

This is a book written by a loser for many losers, teaching them how to pick up girls. It no longer tells you to be kind, sincere, gentle, and considerate, but systematically explains the female mate selection decision process by analyzing how relationships develop step by step from when men and women first meet to the final establishment of the relationship.

This Canadian loser's new dimension of analyzing problems from the decision-maker's decision process suddenly enlightened me. I suddenly realized: the essence of all business activities is understanding and guiding target customers' consumption decisions, and all consumption activities follow a similar process. All components of business activities, whether management or marketing, serve the various stages of this process.

Finding these stages means finding the direct factors that influence final sales. This major discovery got me so excited while reading The Mystery Method that I couldn't calm down. As a result, while the girls I had my eye on back then all became wives to others and I never memorized what M3 was, I ultimately developed this simple and efficient six-step business model, abbreviated as TTPPRC.

They are: Trend, Traffic, Package, Product, Revisit, Cost. From a logical perspective, this classification method isn't particularly rigorous, because the six elements aren't strictly independent of each other. The first five elements all need to consider corresponding costs; strong products can drive more traffic, like word-of-mouth college prep classes; sometimes when traffic reaches a certain level, it becomes packaging itself, like the view counts of popular online store products, etc.

But its analysis efficiency, scope of application, and operational practicality are better than all the business models I've studied before. Not all business theories are meant for PhD dissertations - TTPPRC is truly meant to guide business behavior. And now I am going to show you how.

01 Trend

Let's not talk about the relationship between 小米 (Xiaomi) and "standing on the wind, even pigs can fly" for now. Following trends is the primary factor in all business activities. In the face of trends, individual abilities are ultimately insignificant. Even if business legend 史玉柱 (Shi Yuzhu) were to come out of retirement and insist on opening a CD and cassette tape store in 2015, the probability of success would be minimal. Any industry leader going against trends in the face of the rolling wheels of time is like a mantis trying to stop a chariot. Even Jobs' iPod Classic might not be a match for a second-tier phone manufacturer today.

For most businesspeople, reversing trends and predicting trends are both fantasies and unnecessary. 马云 (Jack Ma) wasn't the first to do e-commerce, and 海底捞 (Haidilao) wasn't the first to sell hotpot. After all, the lifespan of general business projects is much, much longer than fluctuations in financial markets. The first person to eat crab, except for a few geniuses with exceptional foresight and extremely lucky individuals, doesn't have a high risk-reward ratio.

For example, the currently extremely popular wearable devices - few people truly understand where they'll head in the future. Even tech giant Google, when it launched the groundbreaking Google Glass, ultimately ended up with nothing. If you don't have deep pockets or certain technical barriers, entering this industry now has extremely high risk. Even if the wearable device market truly matures one day and people around us start wearing various electronic products, without patent technology and first-mover advantage, you simply can't withstand the slaughter from Apple and 小米 (Xiaomi).

As an ordinary entrepreneur, before your insight reaches an astonishing level, if you discover an obvious market gap, that market most likely simply doesn't exist. In fact, regarding trends, let alone predicting and reversing them - understanding them is already extremely difficult.

The tablet computer market that was hot for just a few years has now become a sunset industry. Young people are starting to visit shopping malls instead of department stores. The price of a bowl of beef noodles in Dalian has multiplied several times over the past 10 years, while internet café access still costs 3 yuan per hour. Rather than racking your brains to interpret why these trends exist, it's better to constantly pay attention to trend changes and follow the tide of the times.

In summary, in the six steps of the TTPPRC model, trend is the first step and can be considered the major premise, but it's not an easily obtainable competitive advantage. For most business projects, the key principle in this step is not making big mistakes. Wanting to stand out is really too difficult.

习大大 (Xi Dada - referring to President Xi Jinping) has cracked down hard on public fund dining, so when opening restaurants, go into shopping malls for light dining rather than three-story seafood restaurants. Beijing's 京东 (JD.com) and 苏宁 (Suning) both offer same-day delivery, so don't rent stalls in 中关村 (Zhongguancun) to sell phones. All the big V accounts on 人人网 (Renren) stopped updating, so study 微博 (Weibo) and 微信公众号 (WeChat public accounts) properly.

Of course, there will always be a group of people who, like Teacher 俞敏洪 (Yu Minhong), mysteriously established 新东方 (New Oriental) at the beginning of the self-funded study abroad boom, or like Teacher 陈欧 (Chen Ou), precisely and accurately launched 聚美优品 (Jumei Youpin) on the eve of China's e-commerce vertical explosion. Don't worry about whether they predicted the trend or were just lucky.

After all, trend is just one link in the success or failure of the entire business activity. When HTC made the Hero, Samsung and 华为 (Huawei) were still playing in the mud. It can be said that in the entire smartphone world except for iPhone, no company grasped trends better than HTC. Now, however, it's only remembered when people complain about the M9's double chin.

02 Traffic

No matter what you want to sell, you first need to let people know you're selling it. This seemingly bland statement has created Google worth hundreds of billions and 百度 (Baidu) worth tens of billions, and surprisingly, they're both free for ordinary users. Opening a store on 淘宝 (Taobao) costs nothing, but try not buying 直通车 (Zhitongche - Taobao's advertising service) ads. With the arrival of the internet era, people increasingly realize that traffic itself is a huge business.

There are too many companies in the world selling things, and most of them we will never know about. So to let us know they provide such a consumption choice, they spend a lot of money.

In TTPPRC, I simply define traffic as: letting target customers know they have such a consumption choice, where the most important four words are: target customers.

The amazing traffic of voice and video on YY platform was a complete mess when extended to online education. Obviously, YY users who play online games and watch beautiful women dance won't suddenly transform into progressive young people sitting in front of computers paying for classes. The busiest shopping malls suit 优衣库 (Uniqlo), but not 香奈儿 (Chanel). You'll never see 劳斯莱斯 (Rolls-Royce) advertisements on TV. "我们这一代人的困惑" (Our Generation's Confusion) has accumulated tens of millions of clicks, but 乔东家脆皮火烧 (Qiao Dongjia Crispy Baked Bread) in Dalian won't sell a few more...

The above examples seem simple, but application isn't that easy. Whether traffic is effective requires specific analysis. For example, my own cake shop is located in a core second-floor position in a second-tier shopping mall in Dalian, with endless streams of people passing by daily. Although the mall's positioning isn't high, my cake prices are also cheap. Initially, I had high hopes for this location, until I later discovered that the surging crowds hurried past without raising their heads, and I realized: they're not necessarily never my target customers, but at least not when passing this location.

It turns out the mall has seven or eight buffet restaurants upstairs, all doing booming business, and my shop's location is on the necessary path to these restaurants. A considerable portion of people passing my cake shop are either on their way to raid the buffet after starving for three days or just coming out supporting the wall. Rather than selling cakes, I should sell digestive pills.

For a more complete understanding of the traffic concept, let me discuss a few specific but divergent examples.

Traffic isn't omnipotent - it's closely connected with the next step in the six-step model: "packaging." Even the highest quality traffic is wasted if your business project isn't packaged well. For example, because Tencent invested in 大众点评 (Dianping), it gave Dianping a secondary entrance in 微信 (WeChat). However, the huge WeChat traffic didn't bring high conversion rates to Dianping's group buying, partly because the comprehensive experience of WeChat's secondary entrance was much worse than the standalone Dianping app, and the current results are mediocre.

Strong brands can generate traffic independently. For example, 如家 (Home Inn) locations can be worse than local budget hotels because target customers will follow navigation to find them. We'll see this repeatedly in later case studies - the first function of a brand is to generate traffic. Different business projects have vastly different specific traffic needs. Generally speaking, the more standardized and replaceable a business format is, the more important traffic becomes for the entire business, such as selling iPhones on 淘宝 (Taobao), selling milk tea in shopping malls, or selling study abroad services in 海淀黄庄 (Haidian Huangzhuang).

Business formats with strong differentiation have relatively smaller direct traffic needs and can use clever promotional methods to get target customers to come to them, such as private clubs, 爱马仕铂金包 (Hermès Birkin bags), or famous angel investors. Monopolistic industries make so much money because they monopolize the traffic for rigid demand. I won't dare give examples.

For businesses targeting enterprises rather than mass consumers (B2B and C2B), traffic is determined by the sales team's strength. The engaging workplace novels "圈子圈套" (Circle Trap), "输赢" (Win or Lose), and "做单" (Making Deals) all tell stories about obtaining effective traffic. Many businesses that seem to target ordinary consumers actually import their main traffic through sales teams rather than mass advertising, such as Beijing state-owned enterprises mostly issuing 味味美 (Weiweimei) bread cards as employee benefits rather than 巴黎贝甜 (Paris Baguette).

Mobile internet is the current king of traffic, previously it was PC internet, and before that, television! Without television, NBA players wouldn't earn much more than theater actors. Entertainment companies understood the importance of hype long before the internet era arrived, simply because their business has such high demand for mass traffic.

The charm of internet entrepreneurship lies in: the internet breaks traditional industries' geographical restrictions on target customer traffic. In fact, although geographically restricted traffic is limited, it's also natural protection. Clothing stores in busy commercial streets that aren't doing well can still sell a few pieces daily.

Internet traffic has a Matthew effect - online clothing merchants that don't open for business daily account for the vast majority. The internet industry has been destined for polarization since its birth. Platform-level companies are even more winner-takes-all, at most dual hegemony. As for third place, what's third place?

99% of internet startups are destined to leave no trace, and the reason doesn't need complex analysis - they simply can't get past the traffic barrier. Whenever young partners around me passionately tell me they want to make a mobile app to change the world through mobile internet, I gently accompany them to open the App Store, look at those unfamiliar names, and tell them that the distance from millions of developers' apps running from software stores to users' phone desktops is measured in light-years.

I remember seeing a list of 50 representative online education companies that closed down last year. Except for 龚海燕 (Gong Haiyan)'s 梯子网 (Tizi Wang - Ladder Network), I hadn't even heard of the remaining 49 before they were swept out by the market. Internet entrepreneurship remains the era's most perfect trend, but if you haven't figured out how to break through this traffic barrier, other aspects don't need consideration.

As internet traffic business itself has gradually become a monopolistic industry, online traffic prices are getting higher and higher. Currently, China's most cost-effective full-network traffic import methods are still 微博 (Weibo) and 微信公众号 (WeChat public accounts), with 知乎 (Zhihu) and 豆瓣 (Douban) in the second tier (local O2O traffic is mainly controlled by 大众点评 (Dianping) and 美团 (Meituan), with 微博 (Weibo) and 微信 (WeChat) slightly behind).

You see traditional industry bigwigs like to keep quiet and make big money, but internet company founders or those using internet as their main sales channel all pretend to be happy and work as hard as 陆琪 (Lu Qi) and 留几手 (Liu Jishou), sharing daily life insights with netizens (B2B internet company bosses not included), even appearing in your parents' WeChat friend circles.

Ultimately, the primary standard for a businessman's commercial ability is how much traffic they can generate for their business. Whether it's old-generation entrepreneurs drinking until they vomit blood at dinner tables to win deals, or 孟兵 (Meng Bing) visiting 潘石屹 (Pan Shiyi) to ultimately secure a golden shop space for 西少爷 (Xi Shaoye) in 望京SOHO (Wangjing SOHO), or 郭敬明 (Guo Jingming) being willing to let 杨幂 (Yang Mi) post on Weibo joking about his sexual orientation to promote 小时代 (Tiny Times) - these are all manifestations of first-class traffic generation ability.

Of course, the classical method of relying on excellent product quality and word-of-mouth to let more consumers know about such consumption choices hasn't been eliminated, but relying solely on this can no longer keep up with this era's development speed.

03 Package

The packaging discussed here isn't the box containing the product, but a broad concept that includes a business project's design aesthetics, marketing promotion, brand story, pricing and discounts, and other series of non-direct product experience display parts. In other words, after target customers learn they have such a consumption choice, what appearance does your business present to consumers? Packaging is a somewhat bland word - I prefer to call it gimmick.

In an era where online and offline traffic prices are rising, packaging without gimmicks is wasting traffic. In fact, unless you're selling those bulk commodities that can be directly bought and sold on commodity futures exchanges, packaging is largely the decisive factor in the success or failure of the entire business, not the product itself!

Look at those well-known entrepreneurs we're familiar with. All those "business geniuses" who can achieve success in multiple fields, such as Jobs, 史玉柱 (Shi Yuzhu), 雷军 (Lei Jun), 雕爷 (Diao Ye), 郭敬明 (Guo Jingming), etc., share a common characteristic: they possess extraordinary "packaging" abilities.

It's worth emphasizing again that being good at "packaging" doesn't just mean being good at "marketing." An excellent package is a comprehensive manifestation of superior management and coordination abilities, leading strategic vision, hungry sales teams, first-class comprehensive execution, and other qualities. Everything that creates impressions about your product before consumers make purchases is determined by packaging quality.

The most common unsuccessful businesspeople in the marketplace always like to emphasize "my product is excellent, it's just that consumers are too stupid and haven't experienced it," and their failure is inevitable. In fact, whether a businessman's understanding of business can be considered entry-level depends most basically on whether they can realize that packaging truly determines whether consumers will consume your product, not product quality.

The product itself determines whether there will be repeat consumption and new traffic import (word-of-mouth)! The most important standard for measuring an entrepreneur's commercial ability, besides importing traffic, is the ability to create packaging. Why can packaging's impact on business be more important than the product itself? We need to analyze this specifically from how people make consumption decisions.

When a consumer decides whether to consume your product, it's not based on the actual product experience (because they haven't used it yet), but based on whether their mental expectation of that consumption experience exceeds the monetary value they need to pay. This expectation is not only emotional but also extremely easy to guide.

More specifically, people's feelings about short-term attraction and actual experience are completely different things, but consumption decisions are mainly determined by short-term attraction, which is the "packaging" emphasized here; while the product itself provides actual experience, determining whether there will be repeat consumption and recommendations to others.

For example, when a consumer first decides to buy a new iPhone, it's not because of iOS system's elegance and efficiency, nor because it doesn't easily lose power in standby mode, and certainly not because it won't lag like Samsung after six months. It's more due to: "This phone is really beautiful," "Rich and handsome people are all using it," "Why need so many reasons, this is Apple!" - this kind of short-term attraction.

In comparison, iPhone's excellent actual product experience determines iPhone users' extremely high loyalty, which is the repeat consumption mentioned later. Conversely, Samsung phones can be considered second to none in packaging in the phone industry, almost matching Apple. The early adoption of large screens, super strong configuration parameters, massive advertising and Korean drama product placement promoted large amounts of first-time consumption. Unfortunately, the product's poor user experience led to low consumer loyalty.

But what really caused Samsung's Waterloo with the S5 was that the packaging itself had fallen behind in market competition. Hardware parameters were no longer as amazing as the S2 and S3, unchanged exterior design paired with the eternal big plastic and protruding camera - it can be said there were no gimmicks at all. Although from a professional perspective, the S5's actual product experience had considerable improvement, especially in battery life and photo effects, with essential leaps compared to S3 and S4, it still became Samsung's worst-selling product in recent years.

Packaging affects consumption decisions, products affect repeat consumption. More common examples occur in the dating market. In most situations, women holding decision-making power base their consumption decisions on short-term emotional attraction, such as men being witty and mysterious, romantic and handsome, having power and wealth, etc. - all belonging to packaging categories. Whether they're willing to enter a romantic relationship with someone is basically determined by packaging.

The advantages that nerdy men think they have - stable careers, filial to parents, diligent with housework, loyal, would be good fathers, etc. - belong to the product itself and are not unimportant, but the other party can only experience these after starting a romantic relationship. Unfortunately, like those dumb businessmen who emphasize "my product is excellent, it's just that consumers are too stupid and haven't experienced it," they haven't figured out that the key to influencing consumption decisions is packaging! Not the product!

Let me continue with a few more divergent examples. For some extreme business models with essentially no product, the entire business core is packaging, such as pyramid scheme scams like WeChat business selling face masks.

Product premium is mainly determined by packaging, and packaging ultimately creates a brand, while brand is the ultimate packaging. Roseonly roses can sell for 999 yuan each, not just because of the beautiful box and rose origin, but because of that vulgar but effective packaging of "can only be given to one person in a lifetime."

Whether it's 海底捞 (Haidilao), 小米Note (Xiaomi Note), or your school's goddess, they all deeply understand: the most powerful packaging in the world is queuing. Entrepreneurs who can master queuing are all top packaging experts, whether real or fake queuing. People's tendency to follow crowds is determined by genes.

B2B industry packaging has completely different thinking from B2C. Corporate customers' average IQ might be 50 points higher than ordinary consumers, but mainly because their demands are different, and there are self-contained interest relationships within enterprises.

Simply put, packaging thinking should be like 华为 (Huawei) rather than OPPO. The more an industry lacks core technology in products, the more it becomes the ultimate competition of corporate packaging abilities, such as bubble tea shops in shopping malls. 快乐柠檬 (Happy Lemon), 都可茶饮 (Doke Tea), and 贡茶 (Gong Cha)'s recipes aren't secrets, but today in high-end shopping centers in major cities, it's hard to see local bubble tea brands competing with the above brands - they're all national franchise brands. Their advantage lies entirely in packaging, not products.

Packaging needs to connect well with traffic. The same brand restaurant, when opened in shopping centers versus communities, will have different store designs and even menu contents. The same e-commerce brand merchants should focus on simple and efficient conversion rate improvement for 淘宝 (Taobao) store packaging, while official website packaging should mainly enhance brand image.

Over-packaging will definitely hurt product reputation to some degree (because people tend to over-expect), but it won't necessarily hurt the overall business effect. In later case discussions, I'll mention: if 雕爷牛腩 (Diao Ye Beef Noodles) didn't have 雕爷 (Diao Ye)'s amazing early publicity and just quietly opened like 鹿港小镇 (Lugang Town) shopping mall chain restaurants, the reputation would definitely be much better now, possibly even becoming that kind of word-of-mouth legendary restaurant, but overall sales would definitely not be as good as now.

The amazing traffic imported by over-packaging and the first-time consumption it promotes are far more important than later negative reviews caused by consumer over-expectations. 罗永浩 (Luo Yonghao)'s 锤子手机 (Smartisan phone) is similar, except 锤子 (Smartisan) had too many quality control problems, and phones as standardized hardware are easily caught with weaknesses.

In summary, the packaging stage is the core display of entrepreneurs' commercial abilities, not achieved overnight. But getting started isn't difficult either. In my view, you just need to carefully read and thoroughly understand three books to roughly appreciate the brilliance of this art. They're all works with low rigor but quick application: 邓德隆 (Deng Delong)'s "2小时品牌素养" (2-Hour Brand Literacy), Sally Hogshead's "迷恋" (Fascinate), and Martin Lindstrom's "品牌洗脑" (Brand Sense).

04 Product

The essence of business is providing products in exchange for corresponding returns. In the fourth element of TTPPRC, we finally talk about products. This isn't because products aren't important, but because as an excellent businessman, strong commercial literacy mainly manifests in: being able to combine the best products within one's capability range with other elements. Providing technically absolutely leading products exceeds a "businessman's" capability range.

For example, we all know selling airplanes is profitable, but opening airlines to make money is much harder. Virgin Group boss Branson is considered a business genius who can establish Virgin Atlantic to profit continuously in the brutal airline business, but he also can't make airplanes to compete with Boeing and Airbus.

If anyone or any enterprise could suddenly develop a cure for AIDS, they indeed wouldn't need any help from trends, traffic, or packaging to quickly dominate the market. Such extremely rare cases don't have value for discussing business concepts. The products we discuss here have certain barriers but aren't rocket science with insurmountable technical barriers where no one in the market can provide corresponding products.

The concept of product isn't just the object itself, but includes services, maintenance, after-sales, and other series of complete experiences consumers get after consumption behavior occurs.

We'll discuss this from two aspects: 1. What is the main function of products? 2. What should a good product include?

In the previous packaging section, I repeatedly mentioned that the main function of products is to promote repeat consumption and import new traffic, not to promote consumption decisions.

Because when consumers truly get your product's complete experience, the consumption process has actually been completed - meaning this money has been earned. If your business model only needs to sell a product once in a lifetime, whether the product itself is good becomes a legal and moral issue, not a business interest one.

However, this business model usually only appears in fraud. Normal business activities pursuing long-term development need repeat consumption from consumers who have already consumed, and new customers for new consumption behavior. These two things depend on the product itself.

Before the internet era arrived, consumers faced highly asymmetric information problems when making consumption choices. So "word-of-mouth" has always been the decisive factor for enterprise survival. Everyone must have encountered friends recommending a small restaurant hidden in obscure alleys. Using our TTPPRC model, natural traffic is terrible, decoration is average with no advertising, packaging can be said to be failing, but business is extremely popular.

We call this phenomenon the "repeat customer" effect. Malcolm Gladwell in "引爆点" (The Tipping Point) breaks it down into connectors, mavens, and salesmen for detailed study. From TTPPRC perspective, excellent product experience promotes repeat consumption, imports new traffic, and comes with packaging of the same weight as "queuing" - "friend recommendation."

After the internet era arrived, product reputation spread not only among acquaintances but throughout the entire network. Many businesses that previously had limited traffic and packaging gained massive high-quality network traffic and packaging due to their excellent product experience, completely changing enterprise destiny. Independent musicians like 宋冬野 (Song Dongye) can tour nationally, Rovio became a globally renowned gaming company with one "愤怒的小鸟" (Angry Birds) game, and 老干妈 (Lao Gan Ma) chili sauce became popular in North American international student circles - all classic cases.

Conversely, business cases with strong trends, traffic, and packaging but terrible product quality are countless. Some are directly identified as fraud and prosecuted legally, like 蚁力神 (Yilishen) and toxic face masks; others can't be directly identified as fraud but aren't far from it, like 李阳 (Li Yang)'s speeches, 唐骏 (Tang Jun)'s books, 陈安之 (Chen Anzhi)'s courses... They all cannot survive long-term in the market.

In summary, an excellent product's power is so great it can instantly connect four elements in TTPPRC (product, traffic, packaging, repeat consumption), which no other single element can achieve no matter how well done. So for enterprises planning long-term business, product quality is always the top priority.

The products we discuss here encompass everything, but good products' commonalities are basically consistent, determined by human cognitive methods. So what exactly counts as a good product? Simply put, just two criteria: first, have one distinctive feature; second, no major flaws in other aspects.

Distinctive features allow consumers to leave deep impressions, while no major flaws in other aspects means not giving consumers obvious reasons to give up. Both are indispensable. You can imagine this as a girl going on blind dates, meeting man A from an ordinary family, normal job, 6/10 appearance, but extremely humorous; man B is talented, worth hundreds of millions, looks like 吴彦祖 (Daniel Wu), but unfortunately is blind. For most women, A might be a better choice.

漫咖啡 (Maan Coffee)'s feature is elegant environment and unique decoration, beverages taste average but not undrinkable; BMW's feature is excellent driving experience, interior isn't as good as Audi or Mercedes but acceptable; 万物生长 (Everything Grows) movie's feature is 范冰冰 (Fan Bingbing)'s charming style, other plots aren't outstanding but not too bad...

So all the above belong to relatively excellent products. In the phone market, 2014's well-reviewed machines - 小米4 (Xiaomi 4), vivo X5, 华为荣耀6 (Huawei Honor 6), OPPO Find 7, 一加 (OnePlus), etc., all belong to typical "have features, no major flaws." In comparison, many unfortunate partners don't meet these two criteria: Nokia 1020 has amazing 41 megapixels but unfortunately runs Windows; HTC M8 has beautiful metal casing and Beats audio but unfortunately has an unbearable double chin; 索尼 (Sony) Z3 has no major flaws but unfortunately only has the not-very-attractive feature of waterproofing besides being expensive. 锤子T1 (Smartisan T1) has beautiful system and outstanding sentiment, but unfortunately often has no signal mysteriously, hot like a hand warmer, heavy like wanting to chop hands, charge three times a day, changing SIM cards is life-threatening...

The last thing worth discussing in the product stage is called "details." Details are also a significant indicator reflecting businessmen's commercial literacy levels. Why must we be obsessively devoted to details?

Because although ordinary consumers' thinking abilities are relatively slow, their intuition is sharp. They're insufficient to see through differences in each stage, but can feel iPhone is "easy to use" while Samsung is "not easy to use"; eating hotpot at 海底捞 (Haidilao) makes them "feel good" while community hotpot restaurants are "uncomfortable"; professional players met at nightclubs make people "feel something" while the person your second aunt introduced for blind dates is "boring."

Friends familiar with the internet will discover that although different manufacturers' similar products achieve the same functions, Tencent products just have better user experience than others. QQ ultimately forced MSN out of history, getting used to QQ Mail then switching back to 126 or Sina Mail is extremely painful, not to mention the omnipotent WeChat. Even without early QQ traffic import, WeChat's product experience has already left WhatsApp, 来往 (Laiwang), 易信 (Yixin) far behind. These are all the power of details that Tencent possesses due to having the best product managers.

05 Revisit (Repeat Consumption)

In summer 2013, on the basement level of 久光百货 (Jiuguang Department Store) at 静安寺 (Jing'an Temple) in Shanghai, a cake shop called "徹思叔叔" (Uncle Tetsuya) opened. This shop, claiming to be seriously recommended by "康熙来了" (Kangxi Coming) and coming from Japan, was surrounded by surging crowds from opening day, with dragon-like queues invisible from head to tail, comparable to 虹桥机场 (Hongqiao Airport) taxi pickup points.

Reportedly, people needed to queue for an average of 2 hours to buy a 39 yuan cheesecake, with each person limited to one purchase. This shop of only about 30 square meters selling only one product had daily revenue exceeding 30,000 yuan. What kind of concept is this revenue?

It's equivalent to a 300-square-meter popular restaurant in a shopping mall, a 1,000-square-meter coffee shop in non-commercial centers, 3 面包新语 (BreadTalk) stores with hundreds of bread and cake varieties, or 10 贝尔多爸爸泡芙 (Beard Papa) stores' daily sales.

The unprecedented floor efficiency and investment return ratio drove third-rate profiteers across the country crazy, instantly exploding nationwide. At most, I saw 5 different brand cheesecake specialty stores in one shopping mall. However, in less than two years, most of them permanently left the market, including the original first 徹思叔叔 (Uncle Tetsuya) 久光 (Jiuguang) store. Meanwhile, 面包新语 (BreadTalk) is still 面包新语 (BreadTalk), 贝尔多爸爸 (Beard Papa) is still 贝尔多爸爸 (Beard Papa).

Let's look at another case: if you invested $1 in a certain company in 1968, by early 2015 you could get $6,638 in return, while the S&P 500 index return for the same period was $87. Interestingly, this company neither conquered cancer nor helped humans land on the moon, not only has no connection to high technology, but its products have barely changed over forty years. It's Altria Group, the parent company of 万宝路 (Marlboro) cigarettes.

The R (Revisit) element of TTPPRC explores the difference between cheesecakes and cigarettes. Let's start with a simple example. As consumer electronics, laptops and smartphones have similar popularity levels, and computers have higher average prices than smartphones. But why are businesspeople worldwide flocking to make phones instead of laptops? Why can one iPhone propel Apple from a $70 billion company to $700 billion?

From TTPPRC perspective, MacBook and iPhone are largely similar in trend, traffic, packaging, product, and cost, and the secret from $70 billion to $700 billion lies in the vast difference in repeat consumption. A decent quality computer can be used for three to five years, but even the best phone can hardly escape the fate of annual replacement.

Whether a business project has the ability to generate repeat consumption from consumers is the most common blind spot for many entrepreneurs and investors, especially when the other five TTPPRC elements are nearly perfect. Even some seasoned business tycoons may make wrong judgments due to momentary impulses.

Remember in 2012, OMGPOP company, which had been quietly struggling in the gaming industry for five or six years and had launched 35 mobile games with a 100% failure rate, made a drawing guessing mobile game called Draw Something (你画我猜). In just a few weeks, it spread like an epidemic across global App Store charts.

During that period, my friends and I were like drug addicts, needing to find places to charge our phones every three hours when going out, opening 有道词典 (Youdao Dictionary) more often than WeChat. In less than two months, the then-dominant gaming company Zynga spent $200 million to directly acquire Draw Something's company OMGPOP. The励志 (inspirational) entrepreneurial story became a generational tale in internet entrepreneurship.

Unimaginably, extremely few people pointed out then that, like most mobile games, Draw Something's repeat consumption was a serious problem, especially since Zynga owned the strongest repeat consumption mobile game in the English internet world at the time - 德州扑克 (Texas Hold'em).

In less than half a year, Draw Something crashed at light speed, and Zynga's stock price plummeted due to this $200 million failed investment, becoming a lesson everyone in internet and investment circles must discuss. If they had strictly analyzed this project with the TTPPRC model and reached the repeat consumption element, would they have spent that $200 million so readily? Haha.

Nothing new under the sun, history repeats daily. So whenever I see apps like 魔漫 (MoMan), 脸萌 (FaceMeng), 足记 (Foji) that swipe through friend circles but obviously lack repeat consumption ability getting new funding rounds, I can't help but sigh: this is indeed a golden entrepreneurial era where people are stupid, money is abundant, come quickly, and there will be no future.

Of course, it must be mentioned that not all business projects need repeat consumption. As we discussed in the product section, product quality directly affects repeat consumption. For example, we repeatedly visit restaurants with good taste, and we'll buy the next book from writers who write brilliantly.

But for business projects like wedding ceremonies, college entrance exam training, tourist attraction tickets that most people consume only once in their lifetime, the role of excellent products is mainly to win word-of-mouth for importing new traffic and automatically enhancing packaging for new traffic.

Nevertheless, for most business projects, repeat consumption ability still directly determines an enterprise's development direction and lifecycle. Since repeat consumption is so important, what determines it? In other words, as entrepreneurs, how can you make your business project have strong repeat consumption power?

There are two key factors: first, the natural attributes of the business project; second, the entrepreneur's design of the project. The so-called natural attributes of a business project's repeat consumption are determined by people's long-term behavioral habits and some historical traditions. For example, mobile games are limited by screen size. Except for traditional games like 斗地主 (Fight the Landlord) and 象棋 (Chinese Chess) transplanted to mobile screens, generally speaking, repeat consumption ability is much worse than computer games.

Blizzard can live off one 魔兽世界 (World of Warcraft) for ten years by adding maps and items, while 植物大战僵尸 (Plants vs. Zombies) is almost the limit of mobile game repeat consumption, and 神庙逃亡 (Temple Run) is already outdated.

Note that: whether business projects naturally have repeat consumption attributes is often extremely difficult to predict and analyze. For ordinary people like us, observation and analogy are sufficient. For example, cheesecakes have worse repeat consumption ability than puffs. 吉士果 (cheese fruit) stores in shopping malls basically don't survive a year, but 章鱼小丸子 (takoyaki) can prosper year-round. Even veterans in the restaurant industry can hardly predict these phenomena in advance.

But what we can know beforehand is that their repeat consumption power definitely can't compare to 煎饼果子 (jianbing), 拉面 (ramen), or ice cream, so the latter will inevitably face more intense competition.

Under determined natural attributes, whether the same business project can achieve higher repeat consumption depends on entrepreneurs' design skills for specific project elements.

There are many internal interactions within TTPPRC. One interesting pattern is: projects with weak repeat consumption often have stronger short-term traffic and packaging. For example, facing the generally poor repeat consumption of creative cuisine restaurants, 雕爷牛腩 (Diao Ye Beef Noodles) adopted a solution of small menu changes monthly and major changes every three months, maintaining creative cuisine vs. home cooking advantages in traffic and packaging while improving repeat consumption ability.

Although currently, 雕爷 (Diao Ye) hasn't solved this problem perfectly, we'll discuss this in detail later when we have the chance.

Movies are typically goods with naturally poor repeat consumption. No matter how good a movie is, we generally only go to cinemas once or twice. But 郭敬明 (Guo Jingming) could take 小时代 (Tiny Times), which would be too long even as one film, work hard on traffic and packaging, and forcibly split it into four MVs.

From another perspective, publishing the same story as magazine serials for years, then combining into books, then making TV series, then movies, can be considered fully exploiting the same group of consumers' repeat consumption ability for one story. Truly worthy of being a top-tier profiteer.

Examples of merchants secondary-developing goods' repeat consumption abilities are countless. For instance, I've always felt that non-removable phone batteries are a huge conspiracy. Natural decline in lithium battery capacity will eventually make consumers unbearably frustrated to buy new phones, while my original IBM laptop, after three years and replacing battery and hard drive, still runs smoothly. American universities' textbooks with the same content get new editions annually, and in recent years many publishers simply attach one-time network course activation codes to each textbook. 滴滴打车 (Didi) sharing to friend circles can get discount coupons, both importing traffic and enhancing re-consumption desire...

Looking back, Draw Something's rapid decline might only partly be due to naturally weak repeat consumption. Anyone who played this game knows that as a mobile game, when traffic was highest, it didn't have a systematic addiction system of points, upgrades, obtaining items, unlocking new tasks - the most basic elements. Eventually, seeing the same words repeatedly appear, people naturally lost interest. The operational team bears inescapable responsibility for this project's failure.

Both 魔漫 (MoMan) and 脸萌 (FaceMeng) became popular through friend circle avatars, with naturally weak repeat consumption attributes, but the former clearly has superior business creativity. 魔漫相机 (MoMan Camera) introduced Alibaba strategic investment, launched derivative products, went international, and reportedly will sell customized physical products.

Unfortunately, it missed the golden development period when traffic exploded in the Chinese market.

In summary, a business project's repeat consumption ability is mainly innate. Excellent entrepreneurs or investors must keep this element in mind at all times, both to judge whether a project is worth doing and to better design details to enhance repeat consumption.

06 Cost

I thought about the last element of TTPPRC for about a year and finally decided to put cost here. Because compared to the previous five elements, it seems to come from another dimension. As I mentioned in the preface, the TTPPRC model originates from consumers' cognitive process of a business project, not from merchant operational logic. To do any element in TTPPR well requires first-class execution and efficient management.

But I finally realized that the essence of any business activity is to serve profit. The source of any project's profit is built on the foundation that provided service value can exceed its own costs (although internet-era businesses increasingly seem to turn toward financing and IPO cash-out profit methods, this doesn't mean capitalists will never care about gross margins). All business models divorced from costs are empty talk.

This is also the biggest misleading aspect of the famous work "The Mystery Method" - it doesn't tell losers that when picking up girls, the most important consideration is a person's time cost and emotional cost. So even if Mystery could one day cross oceans to hook up with 刘亦菲 (Liu Yifei), he'd still be a failure in my eyes.

A man's life has too many important things worth doing besides picking up girls. In summary, cost's relationship with trend, traffic, packaging, product, and repeat consumption isn't sequential but contained within each element. Undoubtedly, every element must be constrained by costs.

For example, the core advantage of Weibo celebrities opening Taobao stores is not needing to spend big money on through-train, flash sales, bidding rankings, or fake orders. They not only save huge traffic costs but also celebrity endorsement packaging costs, making profit naturally easier. The same products in grassroots Taobao stores, if bosses lack outstanding business skills and want the same traffic and packaging, most profits get contributed to 马云 (Jack Ma).

Here I'll use a specific example to elaborate on cost's importance to the previous five elements - my personal cake shop "不出二品" (Buchu Erpin) in Dalian High-tech 万达广场 (Wanda Plaza).

The cheesecake craze probably came to the north around late 2013. Although long-term, a shop selling only cakes isn't a good trend, if you want to grasp this bubble's short-term trend, the key is one word: fast.

When I planned this project, timing was far behind peers. As a project without core technology, franchise costs are much higher than creating original brands. But to not waste precious trends, I decided to franchise first. From first meeting the investment manager to opening the shop took only over a month - impossible with original brands. Here you can see trend cost analysis.

Physical store traffic costs are mainly determined by shop rent. The direct foot traffic on the third floor of Dalian High-tech 万达广场 (Wanda Plaza) was quite poor, so rent wasn't expensive. But later facts proved that because this mall is in Dalian's high-tech zone with mostly young consumers, the effective traffic ratio of target customers was relatively high, and surrounding student traffic could be imported through group buying and other means - the cost-performance was acceptable.

In comparison, many peers who paid three times or more rent for shop locations didn't get proportional traffic convertible to sales, instead closing early due to high traffic costs.

Cheesecake packaging costs mainly involve brand choice and shop decoration design. 不出二品 (Buchu Erpin) obviously wasn't the most appealing among available franchise brands then, but compared to 徹思叔叔 (Uncle Tetsuya) and 瑞可爷爷 (Uncle Riko) requiring millions for one shop investment, 不出二品 (Buchu Erpin)'s VI design and decoration style were decent, with franchise fees only one-fifth less. The final packaging effect was worth the franchise fee, but mandatory expensive equipment and overpriced decoration from headquarters had terrible cost-performance.

Cake product costs mainly come from ingredient choices. Besides goods that franchisees must order from headquarters per contract, cost considerations for other ingredients mainly depend on what role these ingredients ultimately play in product experience. Specifically for a cake, cheese must be expensive, but milk can be cost-effective. Of course, the restaurant industry isn't just manufacturing but also service, so human resource costs for service elements in product experience are also important factors to consider. Space limits prevent detailed expansion here.

Simply put, my final lesson learned: while ensuring the same service effect, streamline employee numbers while providing above-average salaries, rather than hiring more people with average market treatment. As a single-product cake shop with naturally poor repeat consumption, expanding product lines and points promotion are essential.

Unlimited product line extension inevitably causes huge inventory pressure and excessive staff training costs. Considering comprehensive costs, I controlled ready-made cake varieties to about 10, later mainly promoting cakes requiring advance orders. Previous promotions where any in-store consumption could draw 7 yuan low-value coupons somewhat improved repeat consumption but insufficient to compensate gross margin losses, so temporarily stopped.

Another common method to stimulate repeat consumption is points cards. Compared to peers' "buy 10 get 1 free" approach, my points method was buying 5 cakes gets one small gift - previously cups, now forks and knives. The reasoning behind this plan: collecting 10 cakes has too high a threshold to provide corresponding stimulation, while small gift costs are actually lower than cakes and more novel than normally sold cakes.

From the above analysis process, you can see cost analysis permeates every TTPPR element and must be a continuous compromise and optimization process. TTPPR without cost as a basic analysis factor is meaningless. Considering costs doesn't mean being penny-pinching in every element, but final solutions must serve profit maximization. After all, business not aimed at making money is either fraud or hooliganism.

What's TTPPRC Actually For?

If you've read this far with thinking, chances are at least half an hour has passed. In this precious hour, you've definitely been constantly wondering: what's the point of reading this?

Now I'll tell you the answer: regardless of whether you've done business before, attended business school, run companies, or just watched Korean dramas, listened to 五月天 (Mayday), or read 张嘉佳 (Zhang Jiajia), TTPPRC is very likely the most efficient reading material you can find anywhere for understanding all large and small complex and mysterious business phenomena in the world within half an hour.

If you can also remember what Trend, Traffic, Package, Product, Revisit, and Cost represent, from now on your thinking level about all business-related issues can far exceed the average level of people around you. I said at the beginning that business is fascinating because it's the result of many complex factors working together. Although the threshold is low, it contains considerable uncertainty.

Just like chess requires memorizing game records, programming requires learning languages, and stock trading needs trading systems, when you see order from disorder and find patterns in chaos, you naturally start believing in ability rather than luck. I think this is where differences between people come from.

For example, you can now easily know that Hollywood actors can earn so much because their works serve global markets with huge traffic, while small theater drama actors' total income comes from small theater audience tickets, naturally unable to earn much money. Why can some country's oil company make daily fortunes? Because it can directly monopolize traffic, and standardized bulk commodity business basically has no packaging and product elements, naturally strong repeat consumption ability, plus considerable pricing power so no need to worry excessively about costs.

Roadside ordinary-looking barbecue shops can open for over ten years, while exquisite shopping mall restaurants update frequently, because grilled skewer shops have particularly strong repeat consumption ability. Why 好利来 (Holiland) has focused on selling bread in recent years follows the same logic - after all, consumers' repeat consumption of bread far exceeds cakes.

许家印 (Xu Jiayin)'s 恒大冰泉 (Evergrande Spring Water) sold terribly. Experts say its product positioning is unclear, but what does unclear positioning actually mean? TTPPRC tells you it means after consumers know your product (traffic problem solved), they have no consumption desire - that's a packaging problem.

Bottled water business is generally packaging-dominated. Normal people can't distinguish product quality. How to solve packaging problems? First read teacher Sally's "迷恋" (Fascinate), see how many of the 7 fascinating elements 恒大冰泉 (Evergrande Spring Water) has versus 依云 (Evian). See, don't you feel these previously complex-seeming problems suddenly became much clearer?

Of course, like "The Mystery Method" can't guarantee you'll get girls, TTPPRC can't guarantee you'll make money, but it can provide relatively clear thinking. Whether you're starting your own business or encountering work and life-related problems, it helps break down the whole into parts, tackle each individually, simplify to six elements, and quickly find specific directions to solve problems.

Practical Methods for Startup Companies

Regardless of how successful people boast about themselves, an excellent entrepreneur's core qualities always include two points: first, being able to reasonably break down vague ideas into specific problems needing solutions; second, finding the most suitable excellent talent to execute specific solutions.

For example, in my article "你和逃离O2O死亡名单的距离，只差看懂这10个问题" (The Distance Between You and Escaping the O2O Death List is Just Understanding These 10 Questions), I mentioned that many O2O death list projects closed down without anyone hearing about them. After reading TTPPRC, you definitely know that without analyzing much, they didn't pass the traffic barrier.

So what should you do when traffic problems arise? Simply relying on product quality to gain word-of-mouth users obviously can't keep up with internet company development pace. You already know you need more traffic, but where does traffic come from?

Excellent entrepreneurs must further refine this problem, leading to the five cost-effective traffic acquisition methods mentioned in that article (excluding ground promotion). Next step: find the most excellent talent to execute each method and get quantifiable results.

1. Everyone Loves 100,000+ Strategy. Executor: New Media Director

Research common attributes of recent friend circle popular articles (article structure, narrative style, emotional appeal), write company products/services into similar stories (inspirational, healing, funny), find excellent channels (Weibo big accounts, relevant field KOLs, WeChat) for distribution, calculate spread effects and backend growth.

2. Founder Monkey Performance Strategy. Executor: Founder

Study the tone of public figures that target users like and their common exposure methods: university speeches about life, startup competition wit, 非常勿扰 (If You Are the One) talking about feelings, Weibo feuds with seniors... 罗永浩 (Luo Yonghao)'s phones don't sell great, but the same products thrown to Nubia probably couldn't even sell a fraction.

3. Research Media Preference Strategy. Executor: Founder + New Media Director

This is actually the same as the first, just with more specific implementation ideas. Seeing 36氪 (36Kr), 虎嗅 (Huxiu), 创业邦 (Cyzone) recently spreading "O2O死亡名单" (O2O Death List), I must quickly give them a solution article. "我们这一代人的困惑" (Our Generation's Confusion) received so many reprint requests daily - can products be integrated into similar articles? Premier strongly advocates industrial upgrading - even if I'm in steel, I must write a transformation story to join in. Grasp media preferences and the whole world shows your figure.

4. Offline Traffic Import Strategy. Executor: Sales Director + Technical Director

Who says O2O can only import traffic online? Technical teams explain product advantages to sales teams, sales directors lead BD teams to negotiate store by store. If your product can provide convenience to merchants like Alipay, merchants might help promote too. The community service public account on my phone was recommended by the convenience store guy downstairs.

5. Elevator Advertising Strategy. Executor: Marketing Director + Design Director

Marketing directors research target customer main activity locations, calculate foot traffic and corresponding indicators, select most suitable office buildings, find corresponding elevator advertising suppliers, set packages and prices, have design directors create content with spreading power, choose appropriate timing for investment based on product development status.

The operation methods discussed above aren't necessarily most correct, but they represent an entrepreneur's problem-solving mindset rather than complaining: "No users, what to do? You idiots, go find users!"

In summary, as someone from chess background and a late-stage OCD patient, I have near-crazy obsession with breaking down any project into executable steps. This is how the TTPPRC model was born. Only children argue about changing the world; adults should care about execution.

The biggest difference between business and chess is that the former requires many excellent people to execute each step together. For complex enterprise structures like O2O platforms, no matter how well I write posts, I can't make a living writing public accounts like 李叫兽 (Li Jiaoshou).

I need to gather iron-fisted sales leaders who can lead BD teams in morning exercises and slogans, operational masters who maintain user communities harmoniously, talented young learners who master Weibo and WeChat like little 李叫兽 (Li Jiaoshou), product managers who simplify powerful functions so even my parents can understand... Breaking through each TTPPRC element individually, ultimately combining into a force competitors can hardly match.

I understood one principle when very young: to do what others can't, you must take different paths from others, just like making above-average stock returns requires taking risks others won't take. This O2O venture is the same - you can't rely on strategies everyone knows, ordinary startup teams, and common financing scales to create products that change a generation's lifestyle.

So if you think your unusualness should witness a miracle's birth, welcome to email me. I often think lately: if I had taken all the planning case requests received over these years, would I not be running around meeting investors daily now? But a voice rings in my ears again - what 可能是全美创业学学术界最著名教授之一的Dr.K (possibly one of the most famous professors in American entrepreneurship academia, Dr. K) half-jokingly told me during graduation season after completing the quirky but famous Entrepreneurship major at Kelley School of Business: "For those who can't, teach; for those who can, DO."