Nearly two-thirds of internet middle and senior managers are leaving, but it's not an age problem
Twenty years of high growth in the internet industry relied on the technology dividend and the user dividend; the dividends masked a lack of management capability. Today organizational bloat has turned into internal friction, and the exodus is the industry's self-correction, not a 35-year-old crisis.
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The exodus is not an age problem, it's the ebbing of dividends
Colin attributes the exodus of internet middle and senior managers to the fading of two dividends: the internet technology dividend and the user dividend from nationwide internet adoption. During high-speed development, the demand for management capability was relatively lower than in other industries, but industry growth masked this capability gap. When the industry itself needs to develop deeper and higher, some people can't keep up with the requirements and can only look for new directions—either doing investment, lying flat, or combining with traditional industries. He stresses this has nothing to do with age 35; the essence is that the industry stage has changed.
— ColinThe exodus rate is nearly two-thirds, split into two types of people
Colin gives the figure of nearly two-thirds for the middle and senior manager exodus rate. He divides the exodus into two categories: one is those who, after achieving financial freedom, passively leave, lie flat, or look for investment opportunities during internet involution; the other is those who have not achieved financial freedom but have a perpetually dissatisfied way of thinking about personal development and career, and actively seek new horizons. He specifically notes this is not specifically about Baidu; Baidu's organizational adjustments were relatively early, while other internet companies have been more aggressive in organizational adjustments.
— ColinBaidu once treated 50,000 people as a goal
Colin recalls that when he joined Baidu in 2013, there were no more than 100 managers at director level or above, with high demands on people and restrained promotions. The real expansion occurred in 2015 and 2016, when mobile internet shifted from extensive to refined, and killer products like ByteDance, Kuaishou, and Meituan exploded, leading to disorderly hiring. Within Baidu there was once talk of ‘when will we reach 50,000 people’, which Colin questioned at the time but could not challenge. He did the math: annual revenue of 80 billion RMB divided by 50,000 people gives per-capita output that is okay at the starting stage, but if revenue doesn't continue to grow, efficiency drops—if 10,000 people could achieve 80 billion, wouldn't that be even more impressive?
— ColinThere are four best times to get on board
Colin divides the best times to join the internet into four waves: the first wave was at the beginning of the century when PC internet was just starting, when most people chose foreign companies, consulting, or financial institutions, but the truly good choice was to join Tencent or Baidu; the second wave was after the 2008 financial crisis, when PC internet found its product model and business model, and a group of outstanding people passively joined internet companies and later became executives at big tech firms; the third wave was the mobile internet transition in 2012 and 2013, when Colin himself joined; the fourth wave is the deep integration of mobile internet plus AI plus industry, that is, 2015 and 2016.
— ColinShein applied algorithms to the supply chain
Colin uses the apparel industry as an example: traditional apparel is futures, and for a company like Nike, developing a new product to market takes a year and a half, while ZARA takes at least a month, which was considered the limit at the time. But Shein got new product development down to seven days, beyond his imagination. After breaking it down, he found that Shein's earliest team came from search engine marketing services; the founder started a fast fashion business, applying algorithmic capabilities not only to marketing but also to supplier selection and management, trend forecasting, and new product prototyping, pattern-making, and launch. If market feedback is good, production is immediately increased; if unpopular, it disappears immediately. This is a case of internet technology combining with the entire value chain of a traditional industry.
— ColinProfessional managers who start businesses must first distinguish platform from their own abilities
Colin says whether one can be a CEO comes in two modes. One is the born CEO, who doesn't stay long in a company, leaving after one, two, or three years, always on the entrepreneurial path; the leaders of Pinduoduo, ByteDance, and Meituan are all this type of born entrepreneur. The other is professional managers from big tech who start businesses, and the probability of success depends on whether they clearly understand: how much of their success at the big tech firm was the platform's ability and how much was their own. If they stayed at the big tech firm too long, got used to resources being readily available, and never stepped out of their comfort zone, the probability of entrepreneurial success is relatively low.
— ColinEntrepreneurship is jumping between extreme freedom and extreme lack of freedom
Colin describes his own entrepreneurial state: extreme freedom because the space for imagination opens up, always being responsible to the market and users, thinking from the endgame and developing the business based on true user value, whereas in a big tech firm one often drifts off course. Extreme lack of freedom has three layers: after leaving the big tech halo, there are no ready-made platform technology resources, and one must build them or leverage others; attracting talent becomes harder because the platform is smaller, more innovative, and uncertain, requiring vision rather than just high salaries; shareholders and investors also have their own expectations and timelines, and managing expectations is much more complex than at a big tech firm.
— ColinMidea used a horse-racing mechanism to select a successor
Colin says Fang Hongbo is one of China's most successful professional managers, joining Midea around 1993, and in 2012 the founder handed over the entire group to him; since then the founder's family basically only attends two board meetings a year and does not interfere in business at all. Midea's success is because it focused early on successor selection and cultivation, built a professional manager training and development system, and before the actual succession the founder gradually placed management power on different CEOs or candidates in a horse race. Colin judges that most first-generation entrepreneurial success companies, if they lack an earlier successor selection mechanism, face a crisis of lacking next-generation management.
— ColinIn their own words · checked verbatim
Actually, I think the essence of this matter has nothing to do with age. It's that the entire internet's previous 20 years of high-speed development in China was based on two dividends: one is the internet technology dividend, and the second is the user dividend from nationwide internet adoption.
其实我觉得这个事情的本质 跟年龄没关系 它是实际上整个互联网之前 那就中国20年的这个高速发展 基于两个红利 一个是互联网技术的红利 第二个就是这个全民互联网化的这个用户红利
Colin1:00
I think for a period, within Baidu it was said, when will we reach 50,000 people? Why was that a goal? At the time I came to the internet from a traditional industry, I had doubts, but I could not challenge it.
我觉得有一段时间 百度内部都提 我们什么时候达到5万人 为什么是一个目标 当时我是从这个传统行业来的互联网 我有质疑 但是我无法挑战
Colin9:06
Own your own business means that on one hand you are free, and on the other hand you are less free. I think owning your own business is a contradictory state between extreme freedom and extreme lack of freedom.
Own自己的business 就是说你一方面你是自由了 另一方面是更不自由了 我觉得是Own自己的business 是在极度的自由和极度的不自由之间的这么一个矛盾的状态
Colin38:31
Back then you only had to manage the expectations of one boss; now you have many bosses, and employees are also a kind of boss.
那只用管理老板一个人的预期 现在你有很多个老板 员工也是一种老板
Colin41:32
Most first-generation entrepreneurial success companies, if they don't have an earlier successor selection mechanism, face a crisis of lacking next-generation management.
大部分这个 一代创业成功的企业 如果没有更早的 有这个接班人的选择机制的话 都面临下一代管理人的缺乏的这个危机
Colin45:34
I think right now, what car to get on now, especially in an economy that is in a downturn, that feeling of hitting bottom—I think actually the opportunities to get on board now are still more diversified.
我觉得就是现在 现在上什么车 特别在经济 现在是下行 就是鼓底的这种感觉 我觉得就是 其实现在上车的机会 还是更加多元化
Colin55:47
Figures
| Internet middle and senior manager exodus rate | nearly two-thirds | 6:03 |
| Baidu managers at director level or above (2013) | no more than 100 | 8:05 |
| Baidu managers at director level or above (expansion period) | over 200 | 11:08 |
| Baidu's annual revenue at the time | 80 billion RMB | 9:06 |
| Baidu's employee target at the time | 50,000 people | 9:06 |
| Nike new product development to market cycle | a year and a half | 23:36 |
| ZARA new product development to market cycle | one month | 23:36 |
| Shein new product development cycle | seven days | 23:36 |
| Returns for big tech middle and senior managers | millions, tens of millions, even up to a hundred million | 53:36 |
| Returns for top professional managers in traditional industries | annualized hundred million | 54:36 |
Glossary
- Individual Contributor
- A role that does not manage a team and produces through personal professional ability.
- stakeholder
- Investors, industry partners, team members, etc., who have an interest in the business.
- social listening
- Capturing user signals and feedback through social platforms.
- vintage
- In the investment industry, the practice of dividing fund performance by year.
How to listen
Suitable for internet middle and senior managers, professional managers considering a transition to entrepreneurship, and investors and HR leaders focused on organization and succession mechanisms.
19:15-20:15 has a segment of garbled transcription, can be skipped.