Chapter 6: Knowing the Law (4.9K)
Whether one believed the 1.5% figure or the 6% figure, both numbers were extremely low. If someone heard them and instinctively accepted them right away without having read the research report, it would mean that everyone was pessimistic about the future of college couples.
Did the love contract emerge because people were optimistic about couples' futures?
Quite the opposite—it was precisely because people were pessimistic about couples' futures that there was a basis for profit.
But in a certain sense, a judgment formed by oneself was deeper and more convincing than mere observation of data from the sidelines.
The thought flashed through Liu Wanying's mind and she understood this at once, finding Yu Xing, her brother's student, increasingly mature beyond his years.
Yu Xing, watching her expression, saw that Sister Ying had indeed grasped his meaning and continued laying out his idea: "First we consider whether this project, this business, can work—only then whether it's good or not. Sister Ying, although I really haven't done any research, my gut tells me this number is even better than the 1.5% I mentioned earlier."
"Our shared understanding of where couples end up determines that this is a viable business, while the real number—possibly under 1.5%, even 1%—determines that it's a rather good business at a certain scale."
Listening to the college student lay out his logic, Liu Wanying thought briefly about the rigor of the phrase "at a certain scale," and genuinely developed an interest in discussing it with him.
She asked two questions: "Do you have a rough user target? A project like this obviously can't be limited to just the student demographic. If you expand from students to society at large, even if your 1% figure is real, the blended overall data will likely decline afterward, and costs will inevitably rise. The business might quickly stop looking good, and there could be a bottleneck problem."
If things ran smoothly, early user growth would show a nice curve, but past a certain point, greater investment would be required to buy continued growth—at which point whether it could still be called "good" would be debatable.
Yu Xing couldn't answer his martial aunt's probing, because just as he was about to speak, the door over there was pushed open.
He could only suspend the topic with one sentence: "That's a problem we can refine once we have a bit of dirty money."
Yu Xing rose to greet his teacher Liu Jingrong and his teacher's wife Yan Lirong.
At thirty-seven, Liu Jingrong was already an associate professor at Southern Medical University, in the prime of his career—except that he himself seemed rather… "coasting" at work, more content with his current life and seeking out everyday pleasures.
Liu Jingrong was carrying a big bag of groceries. Entering the door, he saw his two disciples had already arrived and said with cheerful laughter, "Come, come, today you'll taste my cooking. We're not eating out."
"Old bro, your cooking…" Liu Wanying raised a small objection. "We're fine, but Rong-jie needs proper nourishing."
Liu Jingrong's wife Yan Lirong was pregnant with their second child, already showing, and wasn't suited to a stint of laboring in the kitchen.
"Relax, you two keep chatting. I've learned quite a few dishes lately." Liu Jingrong was full of confidence, then called out, "Zhong Zhiling, come, come to the kitchen and give me a hand. And while you're at it, tell me—how are the cardiac muscle cells you're culturing coming along?"
Zhong Zhiling's heart jolted. He looked to his senior brother for help but got no response. This—this…
What more was there to say? The cardiac muscle cells in the petri dish had been stirred to mush by his own hands!
He shuffled to the kitchen doorway and glanced back at his senior brother, already chatting and laughing merrily with the teacher's wife and martial aunt, truly wishing he could trade places with him…
Zhong Zhiling endured a sweat-drenched ten minutes. Soon he discovered that Teacher Liu, flustered as he was, was devoting most of his energy to wrestling with the dishes, so he could only steady himself and flail along with him.
After about twenty minutes, Yu Xing poked his head into the kitchen, and after a couple of exchanges realized the state of the two. He volunteered: "Teacher, let me take over. I don't think you've ever tasted my cooking."
Liu Jingrong, drenched in sweat, made the correct decision after barely holding out a few more sentences.
"Zhiling, you go out too—there's nothing left to help with. I'll just keep it simple." Yu Xing rolled up his sleeves and, heedless of the unlucky devil's gaze, casually banished him to the living room.
"Fine, Zhong Zhiling, come here. Just in time, I'll recommend a few papers for you to read these next few days." Liu Jingrong called over the dawdling Zhong Zhiling.
Zhong Zhiling walked out of the kitchen, looked back at his senior brother now busily at work, then at the teacher, teacher's wife, and martial aunt in the living room… What was going on? Suddenly he wanted to trade places with Xing-ge again…
But he couldn't—he couldn't cook either…
Zhong Zhiling had things weighing on his heart. The more he answered the teacher's and teacher's wife's questions, the more he sweated, and the more he sweated, the more he stuttered. This scene continued until the dishes started coming out of the kitchen one by one.
Having witnessed Liu Jingrong's culinary defeat, everyone already had some psychological preparation for lunch. But against expectations, Yu Xing's cooking actually tasted quite good.
"Not bad at all, Yu Xing. From now on, when you come over for dinner, you're on wok duty." Liu Jingrong praised his founding disciple with great surprise.
"No problem." Yu Xing said with a smile, "On call anytime. My future culinary progress depends entirely on this kitchen of ours."
Liu Jingrong was delighted, feeling this disciple was rather cheerful today, then looked at the soon-to-be-enrolled Zhong Zhiling and found him far too nervous.
He kindly and warmly attended to his nervous disciple, and after a bit of chat heard his sister Liu Wanying and his founding disciple launch into topics he couldn't quite follow.
"A love contract is essentially a wager, really. I was mulling it over just now—it's quite interesting. But beyond the practical operational issues, it has one big flaw: it's easy to replicate. There's no barrier to entry." Liu Wanying took a bite of lotus root and found it nicely crisp.
"Sister Ying, that's true, but that's a problem you only need to consider once you've got some scale and some name recognition." Yu Xing was very earnest. Unlike the bewildered unlucky devil of a junior brother, this martial aunt was someone who could genuinely discuss a project's merits and feasibility.
Liu Wanying shook her head, disagreeing: "Too optimistic. What kind of scale does 'some scale' mean? If you don't consider it now, will it be too late to consider it later?"
"Sister Ying…" Yu Xing's musing was cut off by his teacher.
Liu Jingrong, having overheard this exchange, suddenly sensed something wrong: "Hold on, Yu Xing, you've messed up the generational hierarchy. You call her 'sister,' so what do you call me?"
Yu Xing looked at his teacher innocently.
Liu Wanying spoke up: "What else should he call me? Call me Auntie? Call me Paternal Aunt? Call me Old Auntie? Must you insist on making me sound old? He reckons his way, I reckon mine."
Zhong Zhiling watched the martial aunt and senior brother eagerly, hoping to ride the moment and raise his own standing in the hierarchy, but nobody paid him any attention.
Liu Jingrong glared at his sister, but he really was ten years older than Liu Wanying, and she'd had a mind of her own since childhood, so the glare had no effect whatsoever.
"Eat. I'd say this cooking isn't much worse than Rong-jie's." Liu Wanying clicked her tongue in admiration. "This founding disciple of yours is really something."
Liu Jingrong, having no alternative, could only tacitly accept the "each reckons their own" arrangement.
Yu Xing waited until Sister Ying had settled the hierarchy question, then returned to the earlier topic—but with a different answer: "I think rather than worry about all that, better to think about how to build the scale first."
Liu Wanying nodded in agreement too. For a fledgling project, without a present there was no future to speak of—though of course, failing to think about the future would surely spawn plenty of problems in due course.
"Since the project logic holds at a certain scale, then the next question is how to do it." Yu Xing continued the discussion. "The student demographic will be the initial foundation, especially over this coming month or so. Once this window passes, we'll have to consider quickly opening up a foothold in wider society."
Liu Wanying frowned slightly, considering the timeliness the college student mentioned, and gently shook her head: "Expanding upward to clients is indeed right, but I think expanding from graduates downward is also good. For instance, a freshman couple who marry upon graduation—a hook like that could surely lure in plenty of young customers too. Besides, customer acquisition among students is naturally low-difficulty."
Yu Xing's eyes lit up—that was something he hadn't considered.
But he immediately corrected her: "Not 'lure'—grow together with young users."
Liu Wanying nodded with a smile. Yes, that should be the tone.
She didn't elaborate on the idea, only mentioned it in passing before continuing: "For a project, you really do consider feasibility first. If it's feasible, then consider how to do it. Operating costs, input-output—none of these can rest on passion alone. Have you considered… for example, in a city like Jinling, or a region like East China, how large a team you'd need."
Seeing Yu Xing set down his chopsticks and listen carefully to her voice, Liu Wanying went on to give a concrete example: "Although there's a lot of room between the revenue taken from clients and the redemption designed for them in the end, in actual operations, costs may quickly swallow that up."
"Say you hire one new employee. He has good luck this month and wins the favor of 10 couples—so in a single month he brings the company only 5,000 yuan in revenue."
"Those 5,000 yuan, after covering this employee's salary and subtracting necessary expenses like premises and transportation—how much profit is left?"
"And what exactly does the difficulty of landing those 10 contracts look like? Going by Zhong Zhiling's performance, could he close 5 deals in a month?"
Zhong Zhiling, suddenly named, nursed a small grievance in his heart and silently endured the indignity.
Liu Wanying's voice was unhurried: "For every additional employee, you need at least one new customer every month. Not for one month or two—an ongoing, constant pressure. That demands the company keep expanding, which implicitly requires a market base to support it."
A project running wasn't the same as a project profiting. Team size determined most operating costs, and the love contract was a novel thing—how many people would accept it was also a question mark.
Perhaps a batch of customers could be acquired quickly in a short time, but after the growth phase came the question of how to balance increased investment against stimulating growth, and in the longer term, the matter of redeeming the clients' contracts.
As for market base, that concerned the ceiling and the floor—a matter of overall perspective.
Having said this much, Liu Wanying re-examined the entrepreneurial pitch she'd heard today and smiled: "Seen this way, such a project still has quite a few defects. After all, the so-called demand for love contracts isn't all that hard. In a sense, you could even say it's a demand that's been created. The ceiling and room for imagination are limited, and the longer it goes on, the greater the pressure—unless…"
She tossed out a judgment offhandedly: "Unless we only look at its early-to-mid-stage development. Then it might be a plan that evaluates rather well."
At this point Liu Wanying was suddenly struck by a flash of insight. She looked again at Yu Xing, whose expression never changed, and Zhong Zhiling, who looked uneasy. After a few seconds of thought, she smiled: "But entrepreneurship is just hard. You can hardly take the money at the front end and run, right?"
Yu Xing took a sip of soup. Having heard his martial aunt's analysis produced in so short a time, and now this remark, he couldn't help asking: "Sister Ying, what do you do for work in Xiangjiang?"
"I spent a few years at a Big Four firm; now I do consulting at Bain." Liu Wanying said with a smile. "A matching specialty, wouldn't you say?"
Yu Xing practically wanted to raise a toast. Too well-matched!
The Big Four meant the four largest accounting firms in the world, and Bain was one of the three great global consulting firms. With a résumé like that, no wonder Liu Wanying could so rapidly deliver such pointed, fluent analysis.
"What on earth are you two talking about? What contract? What couples? What customers?" Beside them, Liu Jingrong, seeing that the two's conversation seemed to have reached a pause, finally voiced his confusion. "Why can't I understand a word you're saying?"
Yu Xing glanced at his teacher and decided to add a piece to this discussion, saying: "I have an idea involving cellular proliferation through mitosis."
Liu Jingrong adjusted his glasses and said earnestly, "Oh? Do tell."
"Customers. Direct-sales elements. Lower operating costs." Yu Xing said a few simple words.
Liu Jingrong: "???"
"He's talking to me." Liu Wanying's eyes lit up. First she mocked her brother, then she praised, "If appropriate direct-sales elements could be added, it really would bring considerable vitality—that would raise my evaluation a bit. But I've seen plenty of teams with sound entrepreneurial logic who go astray in execution."
This was phrased somewhat tactfully—"going astray," that pejorative, was aimed at others, but also an appraisal of what she had just heard.
Yu Xing caught the meaning and asked: "Sister Ying, do you know about direct sales and pyramid schemes too? What if we kept the hierarchy to under three levels?"
Seeing him speak so bluntly, Liu Wanying answered just as directly: "You really think three levels makes it fine? The relevant regulations define it by calculating and paying remuneration based on the number of people developed directly or indirectly in a rolling fashion."
She was citing the definition of pyramid selling in the Regulations on the Prohibition of Pyramid Selling passed a few years earlier.
Yu Xing's eyes gleamed, and he pressed on: "What if we constrained the levels and paid no remuneration either?"
Liu Wanying was taken aback. No remuneration?
Yu Xing defended his design: "Say we have Customer A, who helps develop other customers. We don't give cash commissions—we only increase the number of roses he can redeem at his wedding. As for whether… whether this Customer A is ultimately among that 1% who make it to marriage, well, we'll find out three years later."
He spread his hands: "For those three years, there's no remuneration. By probability, even if every customer recruits new customers, 99% of people never receive the final added reward."
Only with remuneration does it count!
So what if there isn't any!
Yu Xing argued further: "Even if it really does come to three years later, and the authorities say our model's feedback isn't acceptable, we'll willingly accept rectification—we'll only honor the contracts' lawful, legitimate roses for that 1% of customers who stood by their love, and anything extra won't count."
He said earnestly: "That way, we only borrow elements of direct selling to stimulate a certain vitality. In actuality, we never successfully execute the step of delivering extra remuneration. At most—at most, no matter how mechanically the law is enforced—we'd count as a minor infraction, wouldn't we?"
The widely experienced Liu Wanying was dumbfounded, suddenly feeling a wildfire of thoughts racing through her heart. The chef stopped reading recipes and took up the Art of War? The doctor put down the scalpel and picked up a sickle to harvest leeks?
Fear not the hooligan's boldness—fear the hooligan with an education…
Yu Xing was discussing with this consultant, yes, but he was also organizing his own thinking.
He saw the worry gradually fading from the unlucky devil's eyes, pondered a few seconds, and continued: "We're not selling insurance, not soliciting deposits in disguise, still less engaging in illegal appropriation. We're simply running a wager, simply conducting business under the Contract Law."
He added a final line: "A novel form of business."
Liu Wanying genuinely couldn't help laughing. Well, well, well—dodging three crimes in a single sentence: "illegal business operations," "illegal absorption of public deposits," and "fundraising fraud." That was rare.
Smiling, she asked curiously: "Do you have a legal counsel or something? Did you consult a lawyer?"
Yu Xing shook his head slightly, but though he hadn't consulted, given that a business prototype existed, presumably it was endorsed or at least tolerated.
He composedly stated his original intent: "We're not trying to make money by cheating people. This is a business that makes money off probability. If possible, I hope that three years from now, for every customer—for every single customer—we redeem the roses at their wedding."
The merchant is benevolent. As for why the customers insist on not coming to redeem—well, that's a question for the customers themselves.
Liu Wanying gave Yu Xing a deep look, then smiled at the inexplicably excited Zhong Zhiling beside them: "Your senior brother knows the law. That's a good thing—good for your project, and good for you."
Zhong Zhiling didn't know why he was excited either, but he said excitedly all the same: "Right! Senior brother even made me the company's legal representative!"
Liu Wanying pressed her lips together. Mm… she took back half of what she'd said.
He knew the law a little too well, huh.
"Zhong Zhiling, come with me to the study." Liu Jingrong, having overheard the three-way exchange and vaguely grasped some of its meaning, rose to his feet with great solemnity.
Zhong Zhiling looked at his senior brother pleadingly.
Yu Xing shrugged: "If you want to be the legal rep, go on then."
Liu Jingrong frowned deeply, sensing a whiff of puppet-master about his founding disciple.
Zhong Zhiling, in the end, rose like a duck driven onto the perch. Plans failed to keep up with changes as he walked into the study, a place of despair where things would have to be laid bare.
Watching this scene, Liu Wanying shook her head and continued speaking based on the project she'd heard: "I have two suggestions."
Yu Xing happened to speak at the same moment: "Sister Ying, I have a presumptuous request."
"If it's presumptuous, then don't say it." Liu Wanying said breezily. "Still want to hear the suggestions?"
Yu Xing answered crisply: "I do!"
Free advice from my Sister Ying of Bain—why wouldn't I listen!