Chapter 108: Quite a Character

On the morning of September 2nd, far away in Yanjing, several senior managers and heads of technology and product development at Baidu had already settled into the conference room early.

In the meeting room, the vice president asked everyone for their opinions on a new minimalist forum called “Tieba” recently launched by EasyListen. Eighty percent of them gave one verdict: impressive.

What made it impressive was the product’s creativity and its integrative capability.

EasyListen itself was a platform offering music streaming and downloads, with users who were all fans of various singers. The newly opened celebrity Tieba forums were micro-communities centered around each singer, brilliantly gathering a singer’s fans into their own dedicated Tieba.

This not only increased the stickiness of EasyListen’s original users but also attracted those who didn’t listen to music on EasyListen but liked certain singers, because here was an exclusive forum named after their idols. With so many fans congregating, the community effect was immensely powerful.

The vice president lamented, “Why don’t we have such advanced product thinking? If we could build a platform like this on top of our search service, we could easily become the largest online community in the country in a single step!”

He was right. In the years to come, with over a billion registered users, it indeed became the world’s largest Chinese-language community. Although they sometimes showed questionable ethics in buying and selling Tieba forums, their sheer scale was undeniable.

The director responsible for new product development—the same one who had asserted in a previous meeting that EasyListen’s product line was too narrow—was now deeply embarrassed. He had thought that as soon as Baidu launched MP3 downloads, EasyListen’s days would be numbered. Unexpectedly, they quickly rolled out a heavyweight product like the celebrity Tieba, which was a direct slap in the face.

In frustration, the executive blurted out, “Since that’s the case, we’ll build a Tieba too—MP3 and Tieba together!”

The vice president glanced at him and shook his head. “I don’t need you to give me hindsight conclusions like that. What I want is your innovation ability, understand? I don’t want you to just see others playing with MP3s and Tieba and then scramble to imitate. I want you to create a product as powerful as Tieba yourselves. As the leader for new product development, you can’t always be a copycat!”

The executive’s face flushed red with shame; he didn’t dare to lift his head.

The vice president’s tone softened slightly. “Of course, we have to do MP3 and Tieba. But have you thought about this? The singer fanbase has already been built by EasyListen. If we start now, how will we operate? I also checked—their Tieba is not just tied to EasyListen. Some even have top-level domains, and these domains are already open. That means they utilized EasyListen’s strengths to build Tieba but intend to make Tieba a standalone product.”

Developing Tieba as a standalone product was also part of Li Mu’s plan. After all, EasyListen only gathered music lovers. Limiting Tieba to singer forums on EasyListen was insufficient for Li Mu. So, he took action, building a Tieba homepage with search functionality, allowing users to go directly to the homepage and search for a singer’s name to enter their Tieba.

At the same time, Li Mu instructed Kong Lingyu to develop a Tieba registration feature so that users could freely create forums. Kong Lingyu was also leading a team of part-time workers to collect celebrity information from film, sports, variety shows, and other fields. It was anticipated that soon Tieba would open registration and launch forums for all celebrities, thus breaking free from EasyListen and singer-only limitations.

At this moment, several managers who had returned from overseas were dumbfounded around Baidu’s leadership conference table. They were already contemplating splitting the company—who exactly was behind EasyListen?

In truth, Li Mu’s vision was to create an ecosystem. EasyListen and Tieba were just the beginning. He had many plans for this ecosystem.

The “Simple Plan for Rising Stars” aimed to let EasyListen start in the field of music streaming and downloads, gathering users with music needs. Tieba was the first step in the ecosystem’s chain—community building.

Once the community started, the possibilities were endless: personal spaces, photo albums, virtual farming, parking spot battles—all future community staples. Moreover, the Taobao domain was still under their control. Historically, Alibaba didn’t launch Taobao until 2003 due to special circumstances at the time. Had they started half a year or a year earlier, relying on their existing user base, they might have had an easier start than Alibaba.

An operations director sighed, “They even have the top-level domain for Tieba. That puts us at a disadvantage. Unless we rename it and quickly develop a mature product to launch, then use Baidu search keywords to drive traffic to our own Tieba.”

The head of technology development was surprised. “Although EasyListen’s concept is clever, from a technical perspective, their products aren’t difficult to replicate. It would be easy to imitate. Besides, their strength is limited. If they can’t find a business model soon, they’ll hit a bottleneck quickly. So, aren’t we overestimating them? We have such strong resources. Once our product is developed, it won’t take long to replace theirs.”

The vice president shook his head. “You can’t just look at things from a technical angle or assume that a lack of immediate profitability means they won’t survive. Their concept shakes us because it will shake others, especially venture capitalists. Although the internet bubble is still affecting the market, capital’s instincts are sharp—they already sense the next internet boom coming. They’re looking for suitable projects early. If EasyListen secures angel or Series A funding, backed by big capital, their valuation could reach hundreds of millions within a year or two with these two products.”

These words left the tech lead speechless.

It was true that the internet was about creativity, technology, and users, but ultimately, it was about capital.

Behind every internet giant stood powerful capital—Sequoia, SoftBank, Goldman Sachs, and more. Investors held large sums, waiting to pour money into promising projects. Without capital support, no top Chinese BTA company could rise.

EasyListen and Tieba were rapidly rising. It wouldn’t be long before other internet firms and investment banks took notice. If they secured Series A funding, EasyListen could start burning money. As long as the strategy was sound, future Series B and C rounds would be flooded with cash from eager investors. Moreover, to maximize returns, investors would also provide networks and resources to help the company expand. Then Baidu might not hold the advantage.

The head of investment spoke up, “Mr. Chen, should we approach EasyListen first? If their asking price isn’t high, acquiring them outright might be good. That way, we can integrate their two products into ours—Baidu MP3 and one for Tieba.”

The vice president nodded. “That’s what this meeting is about. We can definitely approach EasyListen to gauge their expectations.”

He then asked the investment head, “What do you think would be a reasonable acquisition price?”

The investment head thought for a moment. “If it’s just EasyListen without Tieba, maybe 8 to 10 million RMB. This field is still legally gray, so risks exist as laws develop. But Tieba has no legal risk and enormous growth potential. By normal valuation, Tieba alone wouldn’t be below 20 million RMB. Combining the two would raise the valuation further. However, since they’re only a bit over a month old, any offer we make would have to come with a significant discount. I doubt their expectations are too high.”

The vice president remained noncommittal, contemplating before saying, “Let’s approach them first and see what happens.”

***

At noon, Li Mu received an email in his EasyListen mailbox from someone claiming to be Jack Zhou, director of Baidu’s investment department. The email said Baidu was optimistic about EasyListen and Tieba’s development and expressed an interest in acquiring them together. Jack hoped to meet Li Mu in person.

Li Mu replied simply: “Not considering an outright acquisition now. Only open to financing. For Series A, willing to give up a maximum of 10% equity. Set your valuation and email me. I will consider it.”

Li Mu clearly understood that, on its own, the MP3 business’s profitability wouldn’t be outstanding. But for a company like Baidu, this business brought overall value that couldn’t be measured in millions—it fostered and retained a vast user base, greatly boosting valuation.

As for Tieba, its future earning potential was fierce. Selling it now in a package would be a huge loss.

Therefore, he only accepted financing and would not dilute too much equity in Series A. Otherwise, after several rounds, capital might conspire to take control and push him out.

The earlier the dilution, the greater the intangible loss—a truth even children understood.

As for the valuation Baidu would assign, Li Mu was in no rush. Let them think it over slowly. He wouldn’t entertain any offer below 30 million RMB. Moreover, if EasyListen and Tieba grew further, he would raise the asking price accordingly.

Jack Zhou felt uneasy even through the screen. Li Mu’s reply was too decisive—he outright refused an acquisition and was willing to give up only 10% in Series A. It was clear he was a veteran in internet entrepreneurship.

Having worked in investment for years, Jack knew many startup founders had limited vision. Most struggled to get off the ground and immediately gave in to capital, willing to give away more than 51% equity in Series A. Such people saw only tens or hundreds of thousands upfront and ignored the long-term consequences, only to realize later they lost ten or even a hundred times over.

Jack thought that with only 10% equity offered in Series A, even if Baidu invested, the impact would be limited.

The more Jack pondered, the more he realized this was no ordinary opponent.

***

Li Mu and Zhao Kang had tickets for the 8 p.m. train on the 2nd. At 7 p.m., Li Mu, carrying a backpack with his laptop, left home accompanied by his parents. Although his mother wanted to accompany him to register at school, Li Mu refused—he didn’t want her to trouble herself making the trip to Yanjing.

At the neighborhood entrance, they met Zhao Kang’s family waiting. Zhao’s parents also wanted to see him off to Yanjing, but upon learning he and Li Mu planned to travel together, they did not insist.

Li Mu’s mother, seeing both boys only carried backpacks, remarked to Zhao’s mother, “Look at these two—going to university like it’s a game, only a computer and a set of clothes.”

Li Mu laughed, “There’s really not much to bring. The school provides bedding and such. Other daily necessities can be bought there, saving us the trouble.”

Zhao Kang’s father smiled slightly and said to Li Mu, “Xiaomu, when you two get to Yanjing, make sure to look out for each other.”

Li Mu nodded, “Don’t worry, Uncle Zhao.”

Li Mu’s father chuckled, “Old Zhao, Yanjing’s too far—beyond our control. We can’t manage them anymore. Let the kids go out and make their own way.”