Entrepreneur Spotlight: 111 CEO Liu Bets on Team and Change
Operating in China's 'no-sunset' healthcare industry with long-time partner Gang Yu, Junling Yu believes the team is the key to a successful business. This year, his company celebrates its 10-year anniversary.
While China often makes headlines in U.S. media these days, the inner workings of its up-and-coming companies and the innovators behind them are still mostly unknown to the West. In this interview series, CapitalWatch lifts the curtain on the Chinese entrepreneurs on track to make a global impact.
Today, we shine the CW spotlight on Junling Liu, the co-founder, chairman, and chief executive officer of 111 Inc. (Nasdaq: YI).
Founded in 2010 in Shanghai by Junling Liu and Dr. Gang Yu, 111 Inc. has become one of China's top online providers of healthcare. By the end of 2019, it serviced more than half of China's 450,000 pharmacies – the exact number to be announced this week in the company's financial report. Forging partnerships with hospitals, drug distributors, pharmacies, and medical insurance providers, as well as operating its own supply chain and pharmacy, 111 is moving forward in its aim to consolidate China's booming pharma market.
In recent months, as China fought the coronavirus outbreak and pharmacies struggled with closures and shortages, 111 delivered healthcare supplies nationwide and connected doctors and patients online for medical consultation and e-prescription.
Liu and Yu are partners of 13 years, having worked together at Dell Technologies (NYSE: DELL) and co-founded Yihaodian, a grocery platform, which Walmart (NYSE: WMT) acquired in 2015. Now 111's executive chairman, Yu was vice president of global procurement at Dell and, earlier, served as a VP at Amazon.com (Nasdaq: AMZN). Yu co-chairs the board of Zall Group (HKEX: 2098) and also serves as director of Baozun Inc. (Nasdaq: BZUN). He has a Ph.D. in decision sciences from The Wharton School of the University of Pennsylvania.
Meanwhile, Liu, formerly a global VP and president for mainland China and Hong Kong, held executive roles at Avaya China, Openwave Systems, and Lucent Technologies Asia. He is also a director on the board of Hua Medicine (HKEX: 2552) and Autohome Inc. (NYSE: ATHM). Liu holds an MBA from Australia's Flinders University.
In addition, as CapitalWatch found in this interview, Junling Liu is an avid golfer and has a few golf championship awards stashed at home.
CapitalWatch: Tell us about your early years. What was it like growing up?
Junling Liu: I was born in a small village in China. We lived in extremely humble conditions – we had to struggle to find food. I still remembered the days when we grew cotton, and my grandma had a weaving machine to get the cotton into threads. We'd make cloth and our mother would make clothes.
Even in my 20s, we still used sickles to harvest wheat and we used animals to plow the fields, to plant the seeds – everything was manual. If you looked 2000, 3000 years back, it was not too different. Not a lot has happened during that period. We were still living in a kind of agricultural era.
But now, if you look at the changes of the past 20 to 30 years, they have by far exceeded all the changes that took place in those 2000 to 3000 years.
And one can only expect that more drastic changes are going to occur in the next 20 to 30 years. That helped build my attitude towards change and led me to become an entrepreneur.
CW: How did you get into IT and retail?
Liu: I've done many different jobs. At 32, I decided to change direction and get into business, so I got an MBA and landed myself into a job in Singapore in the telecommunication space and from there I went into a mobile internet company.
I then had my first taste of internet and mobile internet. And then I got into IT at Dell, and that's where I met my partner, Gang Yu. And I had a silly idea of delivering supermarkets to consumers' homes because I didn't enjoy the trips to Carrefour and so I tried to persuade Gang to do this together.
It took him a pretty painful 10 seconds to make up his mind and, of course, we built an e-commerce platform. We pioneered the online supermarket business model and we are now benefiting from that – we don't have to go to the supermarkets anymore, we can do all the shopping online.
CW: What led you to the pharmaceutical industry?
Liu: After Yihaodian was acquired by Walmart, we looked at various options and we saw that this industry was extremely outdated and needed to be modernized. There was also tremendous value we could deliver and create.
We viewed this as a "no-sunset" industry – everybody will need some kind of medical service in their lives.
CW: Please share a valuable experience you had in your studies that informed where you are now?
Liu: I think "change management" was the subject I loved the most. A lot of the knowledge you obtain can easily get outdated, but the understanding of how change occurs or how you implement change – that is a framework of thinking.
I really benefited from that – I am the type of person who always wants to challenge the status quo, I always feel restless when I'm in the same mode of work for too long and I always look for better ways to do things. Change management helped me navigate through this fast-changing period.
CW: Who was your idol growing up? What about as you matured?
Liu: My idol was someone not very well-known to the Western world, a fictional character named Qiao Feng. He had the best martial arts skills and he was also extremely smart. He also always wanted to help the underprivileged.
Later on, I admired people who changed industries, like Steve Jobs and Elon Musk. I put my money behind them, and I don't care if they are going to make me money or not. I think that those guys are there changing the world and I want to help them in any way I can.
CW: How did the team at 111 Inc. form?
Liu: We treat everyone in the company as partners, be it in the technology space, in the operations space, in the human resources, and so on. It is a team effort.
I always believed in teamwork and I'm good at certain things, but I cannot be good at all things. You have to find the best talents across all disciplines and enable them to make decisions and take responsibilities. With the best team, you'll build a stable culture.
And I could not be happier with the team we have built so far. We have a very seasoned CFO with whom I enjoy a fantastic working relationship. Our CTO came from Tencent, and our COOs came from Yihaodian and have been with us for more than 10 years, and we have fantastic chemistry.
Obviously, we are continuously on the hunt for new talent.
CW: So you believe that the team is the most important factor in a startup above all else?
Liu: Absolutely. By far. That has been my philosophy and I'm a great beneficiary of that belief.
CW: How did the mission of 111 Inc evolve since you first envisioned to build a company?
Liu: For every miracle to happen it takes a ten-year effort. We are still in our early days but we have become a serious player in the internet-plus-healthcare space powered by our core competence of smart supply chain and our technology platform.
As an entrepreneur, I tend to be greedy and I always want to do better. So, I demand the team to perform better, but on the other hand, I know we have come a long way.
CW: What's your leadership philosophy?
Liu: We have four principles: integrity, customer, innovation, execution.
I place great importance on execution and enabling. I believe that the people who are closest to the customers make the most important decisions on a daily basis. I believe in creating value for the customers and I believe in a culture where we trust people.
We always run the company on that simple philosophy.
CW: What are the three most important qualities every successful innovator needs to possess?
Liu: Vision, ability to imagine and execute, and the ability to build a team.
CW: Looking back at the first few years of building 111 Inc, what, if anything, would you do differently?
Liu: Tactically, there are always things which you could have done in a more efficient way. I reflect on a regular basis on many things I could do differently. But if I look at the bigger picture, I wouldn't do anything differently. We have all the right people, we have the necessary principles in place, and the culture is right.
CW: What are you most proud of regarding your leadership of 111?
Liu: I was never afraid of making mistakes.
There is an article I wrote, called "Shoot First, Aim Later." It sounds silly, but that is a quality I am proud of. If you want to be an entrepreneur, you are bound to make mistakes, and through those mistakes, you will grow and tweak your model.
Given the rapid changes happening around us, sometimes companies get stuck in making decisions. If you fail to make decisions and just do your analytical work, the market opportunity may disappear – and there is no more target to aim at.
I believe that even if you don't have all the data in front of you, you know the direction in which you are aiming. At that time, even a lousy decision is better than no decision. Once you start executing, you will get all your data and feedback on your idea. Then, you can constantly adjust yourself and find the best way to move forward.
That is my simple principle in managing business. I am not afraid of admitting making mistakes in front of my team, and I want to create an environment for my team to feel free to experiment.
CW: Where do you see yourself 10 years into the future?
Liu: I'll be at 111. My dream is that China will have one of the most efficient healthcare systems in the world and I want to see play a part in that transformation in the next 10 years. I hope to see 111 gain a commanding position in the market.
CW: Do you have a retirement plan?
Liu: I don't know if I can ever retire. I have to be engaged in something, stay abreast of new developments.
When we initiate a project, I love the process of converting a concept into reality and nothing can reward me more than seeing that through.
CW: What are your hobbies?
Liu: I enjoy reading, I'm an avid Audible reader. I work out on a daily basis and, when I do, I enjoy listening to different books. I found that reading or listening to a wide range of books provides me with lots of energy.
I also love the game of golf. I used to devote a lot to the game and squandered a lot of money into stupid golf memberships. It's a game that I can really concentrate on and completely take my mind off business, and that gives me some relief. I played it in a lot of the most desired courses around the world, including those that hosted the British Open, Augusta National, TPC Sawgrass, etc. I am a member of three different golf clubs in Shanghai and I have won championships in those clubs.
CW: Who supports you the most in your work?
Liu: My partner, there is no doubt about that. This was probably the smartest decision I made when I started my entrepreneur career. I always understand my limitations and strengths, and having the pleasure of working with Gang for the past 13 years has been most rewarding.
Of course, we have disagreements, but we always have the maturity to resolve our differences.
I enjoy it much, much more than being solo. I may have had more equity in the company, but you wouldn't have the same kind of reward. When you feel the pressure, a pat on the shoulder or a word of encouragement – that is really valuable. I am really proud of that partnership.