Produced | Odaily (ID: o-daily)

Produced | Odaily (ID: o-daily)

It is rare for Li Lin to be in Beijing, and his itinerary is tightly packed: before this interview, he had just received his partners from Indonesia, and there were still guests waiting outside the door. After that, there was an executive meeting that was repeatedly postponed.

The intensive itinerary may be the normal state of Li Lin after his comeback.

In 2015, Li Lin once faded out of Huobi management due to physical problems. "I feel that I really can't hold on, and I don't want to affect the development of the company. Would it be better to change someone?"

However, there have been times when he had to "come back": the last time was in 2017, this time in July 2018.

"Why did you return to Huobi?"

"Because the company has encountered some problems."

After his comeback, Li Lin performed major surgery on Huobi: focus on core business, strengthen the construction of middle and back offices, adjust marginal departments, and strengthen internal risk control.

He asked all departments to reorganize the system in order to strictly implement it in the future. During this period, every penny spent on Huobi was approved by Li Lin. "After that, at your level, you have as much authority as you have." An employee gave an example. Li Lin hopes that the culture of integrity and rigor can be implemented in management.

Now that Li Lin has been back for almost a year, has the Huobi problem been resolved?

"It hasn't been completely resolved, but it has made great progress." Li Lin replied to the Odaily reporter.

In the third quarter of this year, the repurchase/destruction amount of HT increased by 70.6% compared with last year's Q3.

At the Huobi Group Partner Conference in September, Li Lin also publicly stated that Huobi has obtained compliance exchange licenses or established compliance teams in many countries or regions around the world; in terms of business, Huobi has changed from last year. The situation has achieved good results in multiple core businesses.

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Huobi brakes, Li Lin returns

In 2018, Huobi experienced a round of rapid expansion: the team size has grown from more than 300 people at the beginning of the year to more than 1,300 in the second half of the year, and the business has changed from the original exchange only to the globalization of horizontal trading business. With the Huobi Global Station, South Korea Station, Japan Station; vertical layout of the entire industrial chain, including wallets, mining pools, capital, research institutes, Huoxun, Huoxun, public chains and other industries.

When the outside world seems to be the best of Huobi, there may be hidden risks.

Huobi is developing too fast, dangerously fast. When asked about the worst decision he ever made, Li Lin said that there were many, and he couldn't pick the "most". But in the end, he said: "During the strategic expansion period, the strategy was too extensive and the decision-making was too hasty, which caused the company to take many detours."

At that time, the blockchain industry was in a bear market, and the transaction volume and user activity of the trading platform declined accordingly; at the same time, the trading platform, as the center of the "right to speak" in the blockchain industry, played a role "close to money". It is very prone to corruption and other behaviors within itself. As a leading trading platform, Huobi is no exception. Coupled with the previous rapid expansion, the business volume and management problems have become more prominent in the cold winter of the industry.

Radical business expansion distracts the team, dilutes the original culture, and lacks supporting management support behind it, which affects the development of various businesses and even reflects in performance and market share.

Li Lin had to come back.

Recently, in an exclusive interview with Odaily, he shared the changes in Huobi since his comeback, the philosophy behind Huobi’s business layout, and his views on some cutting-edge businesses.

He told the Odaily reporter that his energy is mainly in three aspects: company strategy, management and talent.

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Back to the core, explore the boundaries

In the letter to all employees at the beginning of 2019, Li Lin pointed out that Huobi’s “strategy is not focused enough and tactics are not clear enough” due to the too fast and too wide layout and the globalization.

The trading business is the core of Huobi, and it is also the "cash cow" of the group. The decline in performance under the bear market touches the bones. Undoubtedly, Huobi needs to return to its core business and clarify its energy allocation.

Business adjustment is inevitable, the core business is strengthened, and marginal business is reduced or even abandoned.

"The whole Huobi is a digital asset management platform." The contract business, which is extremely related to transactions, has been significantly strengthened this year. Huobi even launched a fee reduction policy to compete for existing users. Huoxun and other application businesses have been abolished.

According to third-party data, this year Huobi has achieved good results in core businesses such as coins and contracts. According to Li Lin’s personal WeChat account in July, Huobi’s trading volume is basically on par with other top exchanges, leading alternately.

To focus on the core business, we must also focus on the construction of the core middle and back office.

Rapid front-end business expansion requires strong middle and back-end support to provide sufficient support for the front-end. "We need to build the background capabilities for global expansion, such as our production research, marketing, administration, finance, etc. This is why we made a strategic contraction last year, because we found that we did not keep up." Huobi COO Zhu Jiawei also Since then, he has been responsible for the middle and back office management of Huobi.

Li Lin said that unlike exchanges such as Bitfinex, which travel lightly, Huobi’s strategy is to “build an ecology”. In addition to “focusing on the core”, Huobi also needs to explore the boundaries.

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Strict risk control and strengthen management

Li Lin believes that rapid expansion has brought management problems, and loose risk control has put Huobi's brand at huge risk. "There are many outside Huobi employees who are not Huobi employees, but under the banner of Huobi, Huobi Club, Huobi Super Partner, Huobi Cloud, they have signed some partners, these are non-staff personnel of Huobi, but they are on fire The brand of the coin. It’s a matter of governance.”

Improving the company's system has become one of the key points of the reform, and even made some employees "slightly uncomfortable" during the period.

Comprehensive rules and regulations and business sorting are the basic work after his return. According to Huobi employees, the boss asked each department to write their own responsibilities, implement process specifications and rules and regulations for a period of time. Posted by staff.

This process lasted about two months. During this period, the financial department needs to re-establish the authority of each level and the specific project budget standards. Before the standards are finalized, the financial department will suspend the review. At that time, every penny spent by the entire Huobi company was reviewed and approved by Li Lin. "After that, at your level, you have as much authority as you have. It was there before, but it was not so strict." An employee gave an example.

After that, Huobi has restrained its external strategy. In terms of marketing style, in 2018, Huobi held public chain leader elections and filmed a film called "Love on Fire", which is quite high-profile; this year, it is relatively stable, and its external caliber has been strictly audited. . In terms of external cooperation, the former Huobi Club has also kept a low profile.

"We are a quasi-financial company, and we need a rigorous culture. Our management was not rigorous enough before, and we are in a relatively high-risk industry, so we must be cautious." Li Lin hopes to remind employees of Huobi's positioning with strict internal control And the value of "integrity and no evil".

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Deciding Whether to Make a Business Look at Two Ideas

Odaily: What is your current work focus and work status?

Li Lin: I am currently focusing on three aspects:

The first is strategy: including the company's development direction, thinking about how the industry will develop, etc.

The global compliance requirements and attitudes towards blockchain and digital assets have been changing, and Huobi has always maintained a relatively leading pace of compliance; the emergence of Libra has inspired different countries and companies, which is a new scenario. Inspired by Libra, some countries such as Indonesia are also considering issuing stablecoins; at the same time, after Libra comes out, there may also be opportunities for application, so I am also paying attention to application opportunities in the field of blockchain and digital assets.

The second is management: culture, organization and talent. Huobi now has offices in more than 10 places around the world, with a total of more than a thousand people. The management is very difficult, and there are many rules and regulations that need to be sorted out.

The third is talent: as mentioned in the management section, a lot of my energy has been interviewing and finding the right people recently. (Odaily: Who are you looking for recently?) People in all positions are needed, such as marketing, R&D, products, etc.

Odaily: You once reposted Bitfinex's white paper and lamented that their staff is streamlined. Today, Huobi has thousands of employees, which is relatively large in the trading platform team. How do you balance team size and business development?

Li Lin: Having more people doesn't mean you don't need to hire people, only good people can help you improve your efficiency. We have a large number, perhaps precisely because there are not enough professionals.

Bitfinex is indeed leaner than us, which is what Huobi needs to learn, but at the same time our strategy is different. I prefer pragmatism, what do you mean? For example, 100 people can achieve an income of 400 million U.S. dollars, and 1,000 people can make 500 million U.S. dollars. I might choose the latter. It is not easy to achieve a score of 70 for a business, and it takes more effort to improve it to 70-90.

Bitfinex does not have customer service, and there are relatively few businesses, but the structure is better, so it requires fewer personnel. If Huobi abolishes the customer service team, the cost can be greatly reduced, but it will affect the user experience. We do not use the human-efficiency ratio as a KPI, but to assess whether we can provide users with better services; in addition, Huobi follows the global compliance route, and has offices and corresponding localized trading platforms around the world, as well as mining pools, Ecological businesses such as wallets, these are not available in Bitfinex.

Odaily: Huobi’s team is very large, with the largest number of people among mainstream exchanges, and many business lines. Controversial business lines such as Huobi Wallet and Huoxin are also continuing to make efforts this year. How to decide which businesses should To do or not to do?

Li Lin: The business we do is based on two concepts.

A basic concept: We must do what involves assets.

Trading is our core business, and the mining pool is a basic business as a supplement to the trading business. Although there are not many resources invested, we have to do it ourselves when it comes to assets. The entire Huobi is an asset management platform. Wallets and mining pools are all front-end and back-end businesses of the transaction, increasing user stickiness. As for applications, such as information-based Huoxun, we no longer do it.

There is also a concept: if it is not necessary for us to do it, and there are good ones on the market, we don't need to do it.

The reason why we did Huoxin is because we really didn’t see any particularly good ones in the market with various restrictions, so we decided to give it a try. In fact, these businesses are some innovative businesses that don’t invest much resources, maybe not even one-tenth of them. They do not occupy core business resources and are innovative businesses.

Odaily: What is the current progress of Huobi Chain?

Li Lin: The public chain is also an innovative business. We are using traditional technology to build a new type of trading platform. Although Huobi’s main business already has a certain leading edge, the industrial form of the blockchain asset exchange in the future may undergo profound changes. The exploration of public chain technology and business models is not only an innovative breakthrough, but also a strategy defense.

The Huobi Chain is still under development, and we will open source the code in October this year.

Odaily: You put a lot of emphasis on compliance around the world.

Li Lin: Yes, because Bitcoin itself has no borders, so trading platforms naturally need to conduct business all over the world.

Secondly, compliance is a trend, and we need to seize the opportunity to enter this market. Japan, the United States (more than a dozen states), Europe (Gibraltar), Thailand... Our strategy is that if any mainstream country or region has a license, we will get it as soon as possible.

We also need to build the middle and back office capabilities that support globalization, such as our production and research, marketing, administration, finance, etc. This is also the reason why we made a strategic contraction last year, because we found that we did not keep up.

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Li Lin:

1. Flow is natural, any company will appear. In the final analysis, the development of the platform does not match the expectations of the employees themselves. It may be that one of them cannot keep up.

2. Our philosophy is to give blessings to any executive who leaves and maintain a good relationship with him. This is our business philosophy: don't regard him as a betrayal, it's just that the needs of the two parties don't match at the moment. You are a former colleague, of course I hope you can develop better.

3. You can never expect to find someone to replace you. Impossible. The founder is irreplaceable. But it does need to be cultivated, but the process is very long. Thousands of troops are easy to get, but one general is hard to find.

Thought about leaving the company, but not because of the bear market

Odaily: You mentioned that the 2015 bear market was a very difficult time for the industry. Can you share the most difficult time you have experienced since starting Huobi? Is there a time when you want to quit and not do it?

Li Lin: I never wanted to leave because of the bear market. On the contrary, due to personal health reasons in 2015, the state was very bad, so I thought about leaving, and I didn’t want to continue to do it. I felt that my body and ability could not support it, and I didn’t want to affect the company’s development. But not because of the bear market, because it still depends on your judgment of the industry. If you think that technological development is good, it is just a cycle of industry development. If you judge this trend, you will not quit because of this.

Odaily: Fade out due to physical reasons, what prompted you to come back?

Li Lin: Because the company has encountered some problems. Mainly business direction and management. My principle is: when the company does not need me, I will not show up.

Odaily: Has the recent problem been solved?

Not completely solved, but we are making progress. At that time, the management was very chaotic, and the development of various businesses was affected, even affecting the company's core performance and market share. Now the company's performance has improved significantly.

Odaily: Since your return, Huobi has undergone internal adjustments for more than a year. What do you think are the biggest changes this year?

Li Lin: In fact, there are many changes, and it is difficult to repeat them one by one. In general:

1. The strategy is more focused, and the business returns to the core, focusing on the capacity building of the middle and back offices.

You can see that we no longer pay too much attention to the business and publicity of the front office recently, but strengthen the management of the middle and back offices, and build a middle and back office that can provide a stronger backing for the business.

2. Strengthen management.

Any fast-growing company will face management problems. Business development is too fast, management cannot keep up, and culture and values ​​are diluted or even alienated.

Odaily: What is the culture of Huobi?

Li Lin: There are many values ​​written on paper, but I think the simplest and most core one is "integrity, not doing evil". We need to think about whether what we do can bring value and positive energy to society.

We will also emphasize aggressiveness and innovation, the characteristics that Internet companies need. Because we are a quasi-financial company, we also need to have a rigorous culture. Before, our management was not rigorous enough, and our risk control was relatively poor, and we are in a relatively high-risk industry, so we must be cautious. Many people outside are not Huobi employees, but they are under the banner of Huobi. For example, Huobi Club, Huobi Super Partners, and Huobi Cloud have signed some partners. These are non-staff personnel of Huobi, but they use the Huobi brand. This is also a matter of management. These two cultures are very important, and the others will not be introduced one by one.

Odaily: How can you be upright and not do evil?

Li Lin: We should not only write these values ​​into the rules and procedures, but also into the system. For example, not to gamble with users, not to induce or control prices, not to make false propaganda, not to cut leeks, these are all expressly prohibited. In the system, you don't have to give any employee permission to view user profiles, so employees can't take advantage of information to bet against users. In terms of internal procedures, the internal audit department can also be asked to investigate whether there are such problems within the company.

There are many ways a trading platform can make money. In a word, Huobi wants to "earn conscience money" and only earn service fees. Every time a project is launched on the trading platform, everyone can make money. It is impossible for market transactions to be made while others lose. What the exchange needs to do is to create a fair and transparent trading environment.

In addition, we do some unprofitable businesses such as Huobi University and Huobi Research Institute, which also contribute to the promotion of the industry.

Odaily: Can you share what you think is the "best decision" and "worst decision" you have made in the process of starting a business?

Li Lin: The correct decision is to create Huobi itself. Not only does it mean that the current blockchain market is not bad, but it has given me a lot of experience, it is very imaginative, and I haven't seen the boundaries yet. I think the choice of this direction is very correct.

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Bitcoin is Experiment, Libra is Practice

Odaily: How do you view the current development stage of the industry? Stablecoins, which were originally considered to be not decentralized enough, have become the most respected applications. The once highly anticipated decentralized applications seem to have to wait for a long time.

Li Lin: "Decentralization represents the spirit of the blockchain." There are actually differences. Some people think that the blockchain does not have to be decentralized, but to improve efficiency.

Personally, I divide technology into three levels:

The first level is data mutual trust. In order to achieve trust, two parties that are difficult to trust each other no longer need to introduce a third-party organization, but can store evidence on the blockchain, and the data becomes immutable.

The second is value interoperability. The specific application is point-to-point payment, such as Bitcoin and stable currency, which will bring huge changes to cross-border payments. Of course, Bitcoin also has the feature of decentralization.

I think the first two levels have been realized, and we can see the application and changes at present.

The third is the sharing of rights and interests, changing market relations and economic operation models. This has not yet reached the time window, and it requires changes in several variables: one is compliance, and non-compliance has also caused problems. The second is the quality of the implementation subject. At present, many chain reforms or currency reforms have been implemented, which makes people have a demonized impression of the blockchain. These companies themselves have limited users and limited influence. This is why Libra was born with global attention. Finally, there is the issue of user penetration rate, which also explains why only digital asset trading platforms have been successfully transformed with the economic model of blockchain, because the user penetration rate in the industry is high.

When one day the best companies can choose to use tokens or traditional stocks to motivate users, then we can really see the changes it brings. At present, this application in small industries is relatively successful.

Li Lin:

Li Lin:

1. Token is more flexible, it can be used right or a security.

2. The Token distribution method is more flexible and refined. For example, the current early investment only rewards investors and employees, whether users can also participate. For example, the early rice noodles should be rewarded.

Odaily: In the early days, many blockchain projects did use tokens to successfully raise funds, but later issuing tokens became a way to collect money.

Li Lin: Yes, so the issuance of tokens is also subject to supervision, and companies that issue tokens must also release financial reports. The issuance of tokens later alienated, that is, the problem of bubble formation brought about by complete liberalization. The early Wall Street, Internet bubble, and early A-shares all went through similar stages. In essence, it is caused by no supervision, bubbles, and high expectations.

From a dialectical point of view, rapid capitalization has also brought rapid development, allowing the industry to try all directions. Now no one discusses the immaturity of public chain technology. What is more realistic now is the user penetration rate, which is also the role of capital . This is very similar to the early American stock market. Anyone who said that building a railway can raise money, and there are many empty-handed wolves among them, but this also promoted the improvement of American infrastructure.

Odaily: There are three levels of data mutual trust, value interconnection, and equity sharing. Which one is the focus of Huobi’s business?

Li Lin: The three levels are inherently related. Under the regulatory framework of many countries, only the first level can be done. The first level is actually to popularize science and test the waters for some countries. Once the regulation allows, it can be linked with the second and third levels.

For Huobi, 80% of the trading volume currently comes from the top six mainstream digital assets. Stablecoins are a bridge between fiat currency and digital assets, and are very closely related to trading platforms. Bitcoin and stablecoins are two proven applications that will be the focus of our strategy in the future.

These two levels are called the Internet of Value, allowing value to flow across borders. At this level, "Bitcoin is just an experiment, Libra is a practice." Libra may change the financial infrastructure.

Odaily: What do you think of the fact that Bitcoin now accounts for more than 70% of the market value, and other so-called mainstream coins have repeatedly followed the decline but not the rise?

Li Lin: It is essentially a return of value. These projects combined applications and issued a token by themselves, which was expected to be too high during the previous bubble period. If it is just giving them a valuation that is more in line with their current value.

As mentioned earlier, the third category of applications is not yet ready and requires changes in compliance and user penetration. Of course, not all industries are suitable for "+blockchain". 99% of projects may die, and 1% may survive.

Odaily: Bitcoin and blockchain have gone through several cycles, with ups and downs. During this process, will you be a little disappointed with the "blockchain revolution", and how has your attitude towards the industry changed?

Li Lin: At the beginning, I just thought that Bitcoin was very special and very imaginative. At that time, the price of the currency increased by 10 times, and I thought it would become a global currency. I also published an article at the time, thinking that it will not become a global currency, but more like gold.

Later, in the bear market in 2015, it fell to RMB 900. Everyone worried that this experiment might fail. This was the most difficult period.

Since then, it has been a bull market, rising to tens of thousands. Although the Chinese government introduced stricter policies in 2017, we later saw that other countries have a more positive and neutral regulatory attitude and began to issue licenses. We also applied for some. It also gives me confidence.

By the end of 2017, the market had entered a mass frenzy, and in 2018 it was a bear market again, from the peak of desire to the valley of despair.

Among these ups and downs, I may be more reflective: which directions are right and which are wrong, and what stage each direction and scene is in.

I have to talk about Libra again, which opened a new window and enlightenment for us. Let us see that the blockchain has greater power in the Internet of Value.

Odaily: At present, Libra is still an enlightenment market, and is still resisted by many national regulators. Will it be difficult to deliver?

Li Lin: It drives the market and ignites the governments of various countries. Instead of letting a commercial giant do it, it is better to do it yourself. The launch of Libra should not be a problem, but where it can be launched may be a question mark. Countries that do not have capital controls themselves are more optimistic.

Why do I say it has the potential to change the future financial landscape of the world? Because if it succeeds, it will strengthen the financial status of the US dollar and further marginalize the currencies of countries that were originally particularly marginal. This is very similar to the Internet age.

Odaily: How do you view the current competition in the exchange industry?

The exchange industry has entered a vicious circle. Once the market shrinks, exchanges will enter the stage of competition and gaming among existing users, and even smear each other, which is not good for the industry.

Odaily: Huobi has been established for 6 years. What will your ideal industry, or the industry you expect to develop, look like in the next 6 years?

Li Lin: From what I can see, blockchain-based technology has formed a value Internet and a stable digital system.

What we are looking forward to is to use the blockchain to change the production relationship. We hope that in this direction, many applications have been born and run more efficiently than today. Everyone owns digital assets. In such a period, I think Huobi Is an important facilitator, leader. This is our expectation.