Chapter 40#

While Meng Lisheng was sizing up Chen Yuanming, Chen Yuanming was also carefully examining the man in front of him. In his later years, he had seen photos of Meng Lisheng in economic weeklies or website news flashes. The man in the photos always looked exhausted, with aging and puffiness having long changed his temperament, leaving only the desolation of old age.

But the person in front of him was completely different. He looked young, about 40 years old. Although his features couldn’t be called handsome, the elegance and demeanor of the older generation of high-level intellectuals were undoubtedly evident. Coupled with his expectations for his future career, his whole person radiated high spirits.

Withdrawing his hand, Chen Yuanming felt a myriad of emotions in his heart. When he learned that Xiao Junyi’s relative was this father of VCD, he was also filled with surprise and excitement. Now seeing him, his thoughts were even more complicated. in those lengthy reports of later generations, his entrepreneurial history received mixed reviews, but the most common description was not praise for his contribution to the VCD industry, but that almost mocking description—“revolutionary martyr”.

Yes, the founder of the world’s first VCD player, the owner of the only independent product in China’s home appliance industry, eventually faced the total failure of his personal career. In the five years from 1995 to 2000, China created a miracle that stunned the world. With just one product, VCD, a huge market with annual sales exceeding 10 billion was created. The richness of profits and the density of enterprises were simply unprecedented. But none of this had anything to do with Meng Lisheng, because his company had collapsed as early as 1996, defeated by those successive imitators, and sadly withdrew from the market.

This first person to eat crabs did not get to taste the deliciousness of the crabs but instead got his fingers pinched…

Smiling slightly, Chen Yuanming gripped the gift box a little tighter. Seeing him now at this time and place, could he reverse the upcoming future?

Because both sides were a bit absent-minded, the scene fell into an awkward silence. Finally, it was Meng Lisheng’s wife who smiled and welcomed the two into the room, serving tea and water, and bringing out melon seeds and fruits, acting very eagerly as if entertaining juniors. When she saw that Chen Yuanming had brought gifts, she showed a very surprised and slightly joyful smile, putting the two large boxes aside.

This flurry of activity finally turned the atmosphere around, but the originally planned formal meeting also came to nothing. Meng Lisheng looked somewhat bitterly at the materials he had sorted out overnight in the past few days, not knowing what to think. He wasn’t actually familiar with “venture capital”, but after detailed communication with Professor Yan, he still chose the safest way, preparing materials, preparing for battle overnight, racking his brains on how to promote his product, and even listing a standard profit distribution plan, ready to try to contact this investor.

But now? Meng Lisheng only felt that the materials under his hand were unusually hot, like a joke. How much of these dozens of pages of materials could such a child understand? If he was just a young master looking for trouble, what was the point of all his worrying these past few days?

Looking at the two people chatting happily with his wife, Meng Lisheng sighed. “Xiao Yi, is this the investor you mentioned?”

“Yes, Uncle Meng,” Xiao Junyi answered quickly. “Yuanming was speculating in stocks in Shanghai with my uncle a while ago, and their relationship is very good. After hearing about your project, he wanted to fly over to see the situation. He gained a lot from the stock market this time and is thinking of developing into industry. He can be considered a rare business genius…”

These words were spoken very appropriately. How could Xiao Junyi not see that Meng Lisheng didn’t want to talk anymore at this point? It was really because Yuanming was too young. If one didn’t know him well enough, one would basically take “sending a child” as an insult. But in this matter, Chen Yuanming was unwilling to find an agent to negotiate indirectly, which created such an awkward situation.

However, this praise did not win Meng Lisheng’s approval. After a moment of silence, he turned his head to look at the teenager sitting on the sofa opposite him. “Chen Yuanming, right? I rarely hear Xiao Yi praise someone like this… But friendship is friendship, business must be treated seriously. I just want to ask, who are you representing this time?”

Even if it was a family business training their young master, it would be fine. Thinking of Xiao Junyi’s identity, Meng Lisheng seemed to grasp the last straw and asked unwillingly.

The smile on Chen Yuanming’s face remained gentle, but the words he spoke were not so amiable. “Mr. Meng must be laughing at me. I represent myself. For a new product, I believe my funds can still support it, but I wonder if this product is worth this investment?”

This tone was not small, causing even Xiao Junyi, whose heart was already suspended, to show a wry smile. Why was he being stubborn now? Where did his usual smoothness and scheming go?

Choked up and unable to speak, Meng Lisheng also showed a wry smile. He really was a young master… But venture capital should indeed look like venture capital. It was already unauthentic enough to have the other party come to the door; could he still show attitude to the financier? It’s just that such an investor might not be a good choice…

With hundreds of thoughts turning in his mind, his face finally returned to calm. Meng Lisheng did not hand the pile of materials to Chen Yuanming, but just cleared his throat and introduced slowly.

“I think you may have already heard about my situation from Xiao Yi. Currently, I am developing a project that can replace laser disc players, which is to use a disc called VCD to replace current laser discs and produce related playback equipment. It has been determined that VCD discs use 120mm optical discs as carriers, with audio-video synchronization full-screen playback, a resolution of 352x288 pixels, 25 frames per second. VCD players can be connected to PAL system TVs for playback, with bit rates of 1150kbit/s for video and 224kbit/s for audio respectively. If the experiment is successful, the video quality will be roughly equivalent to VHS videotapes.”

The terminology was quite professional and also very unappealing. Xiao Junyi frowned. This was not the attitude to truly attract investors. Isn’t selling about being simple, easy to understand, and attractive? Who uses terminology to scare people?

But Chen Yuanming didn’t show any reaction, just pondered for a moment. “Only PAL format, no NTSC format?”

Meng Lisheng was stunned. He actually didn’t expect this child to be able to mention the NTSC standard. PAL and NTSC are the two major standards for TV signal transmission. TV signals in the United States and Japan are mainly NTSC, while China, Germany, Singapore, and other countries use PAL as the standard. Since it is sold in China, it is naturally appropriate to choose the PAL system.

However, as soon as an expert makes a move, one knows if there is substance. Since the other party had really done some research, he believed the sincerity was also more than expected. Meng Lisheng explained patiently, “Currently, our country’s TVs are just transitioning from black and white to color TVs. PAL receiving equipment has lower requirements and better color retention. Domestic color TVs all use PAL system equipment, so choosing it is naturally more suitable.”

Chen Yuanming was noncommittal, just giving a soft “hmm”.

Seeing that the other party did not refute, Meng Lisheng continued, “Currently, a VCD disc can hold about 600MB of content, with a duration of about one hour. The cost is much lower than laser discs and VHS videotapes. If there are no accidents, it can quickly replace other video equipment and become one of the entertainment necessities for Chinese families. We have done some surveys in the early stage. Currently, the sales of video recorders, laser players, and audio equipment in China are all over one million units. If VCD players are put into production, the cost advantage will be quickly demonstrated. After the product enters the maturity period, the annual sales volume is predicted to be around 2 million units!”

This number could not be said to be unappealing, but Chen Yuanming seemed unmoved. After pondering for a moment, he finally said, “Sounds pretty good, but I have two questions.”

He raised his head and looked seriously into the eyes of the man in front of him. “First, how is the originality and uniqueness of this product? Are there similar products appearing worldwide?”

Meng Lisheng answered decisively, “Currently, it is impossible. The MPEG format was developed by my partner Professor Yan. If someone uses this format to develop a new product, he will know in advance. The uniqueness of VCD is unquestionable.”

Chen Yuanming nodded. “If that’s the case, have you obtained industrial property rights? Including all intellectual property rights such as patent rights and trademark rights.”

“What?” Meng Lisheng let out a surprised sound and answered somewhat awkwardly, “This… intellectual property rights is a quite complex issue. Our product development has already taken a lot of time and money. If we spend the remaining energy on applying for patents, it will greatly delay the launch of the VCD player product. I’m afraid the loss outweighs the gain, right?”

Indeed, neither he nor Professor Yan had ever thought about applying for patents. It was really because the issues involved were too complicated, and China’s property rights laws were not yet perfect. Most people simply had no patent awareness. Who would spend time on this?

Chen Yuanming did not refute and immediately asked the second question. “Then, if what is produced is a VCD player, what are your plans for the VCD discs that match this player?”

This topic was even sharper, and it was also the biggest problem they faced. Making a gun but not bullets, wouldn’t that be a joke? Moreover, the promotion and sales of new products were also difficult points… But regarding this point, Meng Lisheng felt he already had a quite complete answer. He answered confidently, “This is not a problem. We will contact a batch of audio-visual companies to produce a certain amount of VCD karaoke discs to be listed at the same time as the VCD players. This will greatly alleviate people’s unfamiliarity with VCD players and can also promote the sales of audio companies.”

“Why audio-visual, and not movies and TV?”

Is this too amateur? Meng Lisheng explained good-naturedly, “Limited by duration. Ordinary movies are all over 120 minutes. A single VCD cannot accommodate it. It is more appropriate to adopt the karaoke mode.”

This is it… Only then did Chen Yuanming show a wry smile. The two problems repeatedly criticized by later generations were just such simple answers. These two fathers of VCD, should one say they were too naive or too stubborn?

Shaking his head gently, Chen Yuanming stated the main point of his trip. “I am quite interested in the product you mentioned. If the plan is indeed feasible, I am willing to put up 50 million RMB as the upper limit of venture capital and hold 30% of the company’s shares through preferred stock.”

As soon as the words came out, Meng Lisheng held his breath. This came a bit too fast, and it was wonderfully beyond his imagination. His eyes involuntarily looked at Xiao Junyi sitting aside, only to see the other party nodding at him. 50 million RMB! And listening to Xiao Junyi’s meaning, this child could indeed take it out! If this money was really invested, it would firmly occupy more than half of the capital, yet only asking for 30% equity. This wasn’t enough for a controlling stake!

“But…” However, before Meng Lisheng could react, Chen Yuanming continued immediately. “I still have some doubts about this project. Two problems must be solved before investment. First is patent rights. You must apply for industrial property rights in both China and the United States, including all intellectual property rights such as invention patents, trademarks, and product appearance. Second is about the content and production method of VCD discs, which needs to be discussed again. If these two requirements cannot be met, forgive me for not being able to throw a large sum of money into the water.”

One shock after another, Meng Lisheng completely didn’t know what to say. Was this being optimistic about their product, or sparing no effort to belittle them? What was the significance of these two requirements? Not looking at the product, not looking at the laboratory, not caring about any important things, but spending energy on side issues instead. What on earth was this child thinking?!

However, at this time, Chen Yuanming had already stood up and nodded friendly to Meng Lisheng and his wife. “Thank you for your hospitality, but it’s getting late today, not suitable to continue talking. I will be staying at a hotel here for the next week. If you can meet my requirements and have sufficient sincerity to cooperate, you can contact me again.”

The words were spoken lightly, but the intention to leave allowed no rebuttal. Meng Lisheng stood up and shook hands with the other party somewhat stiffly, but when seeing them out, he grabbed Xiao Junyi’s arm.

“Xiao Yi, what exactly does this mean today? Why am I confused by you guys? And two conditions, is there something wrong with his brain? Such strange conditions…”

Patting Meng Lisheng’s hand, Xiao Junyi showed a certain smile. “Uncle Meng, Yuanming’s personality is a bit strange, but his vision and ability are truly impeccable. On this point, the entire Xiao family can endorse him. Since the conditions are given, it means he sincerely wants to cooperate, and those two conditions are probably key issues that need to be solved urgently. You might as well think about it carefully…”

“What?” Meng Lisheng heard some overtones. “Isn’t he your friend, here to spend money playing investment? The entire Xiao family…”

Xiao Junyi nodded. “That’s right. My father and uncle are both quite optimistic about him. Although the Xiao family will not intervene in this business, if needed, we will support Yuanming as much as possible.”

Using the Xiao family’s power to support a ten-year-old child, Meng Lisheng didn’t know what to say anymore, just muttering and repeating, “But that problem…”

Xiao Junyi’s eyes rolled. “Uncle Meng, why don’t you take a closer look at the things Yuanming gave you? This kid is shrewd as hell. Maybe what he wants to say is all in those two big boxes.”

After saying this, Xiao Junyi didn’t delay any longer. After saying goodbye to Meng Lisheng, he quickly went downstairs, only to see Chen Yuanming waiting for him in the hallway.

Seeing him coming, the teenager smiled slightly. “How was it? Went to beat the side drum?”

Xiao Junyi also smiled. “Entrusted by the Prime Minister, fortunately did not disgrace the mission.”

The smile on Chen Yuanming’s lips grew, and he nodded gently. “Good.”

“But what exactly is in those boxes?” Now that the silk bag (strategy) has been given, there’s no need to hide it anymore, right? Xiao Junyi asked the same question again.

This time Chen Yuanming didn’t keep him in suspense and answered directly, “It’s two machines. I think Meng Lisheng will understand…”

&&&

Standing at the door, Meng Lisheng didn’t come back to his senses for a long time. The impact Xiao Junyi gave him just now was a bit too big. And what did the boxes mean? Why couldn’t he understand…

Walking back home blankly, he sat on the sofa, thinking hard about everything that had just happened. It was really too fast. In less than an hour, he had confusedly welcomed the God of Wealth and then sent him out the door. What exactly happened in between? Just then, an exclamation came from the side. Meng Lisheng looked up and saw that his wife had already opened a huge gift box and was clicking her tongue in admiration of something.

“What’s wrong?” Meng Lisheng asked involuntarily.

His wife turned her head, the joyful smile on her face impossible to hide. “Look at Chen Yuanming, coming here and bringing such an expensive gift, a learning machine! I’ve been hearing people talk about this lately and was just about to buy one for our son! This must cost 3 or 4 thousand yuan…”

Learning machine? Meng Lisheng jumped up from the sofa. “Quick! Open the other box and see what it is!”

Saying this, he didn’t wait for his wife to react and ran over directly to tear open the packaging. In a short while, the exquisite gift wrapping paper was torn to shreds, revealing a machine inside, red and white, with two controllers, a transformer, and a cartridge.

“What is this?”

His wife’s confused voice came from the side, but how could Meng Lisheng not recognize the thing in front of him? This thing was called the Family Computer, a home game console produced by Nintendo of Japan, commonly known as the Red and White Machine or FC. As an electronic technology researcher, he had seen this thing long ago and marveled at the creativity of the Japanese company. But what meaning did these two machines in front of him represent?

“This thing is called a Red and White Machine, it’s a kind of game console…” Unsure of the problem, Meng Lisheng hesitated to explain to his wife. “That learning machine over there was modified from the basis of the Red and White Machine. It can use the Red and White Machine’s cartridges, just with an added keyboard…”

“Game console? Not a good thing, right?” In these years, parents feared games like tigers and wolves, wishing to eradicate all poisonous weeds that affected children’s studies. Hearing the famous name of the Red and White Machine, the other party naturally frowned. “The learning machine is better! Those game consoles should all be banned!”

As soon as these words came out, Meng Lisheng felt a thump in his heart and froze on the spot. That Chen Yuanming, was this what he meant?!