Thread by @lillianmli

1) Meituan co-founder Wang Huiwen was with Meituan from inception to IPO. He retired at age 41 a billionaire.

Wang thought deeply about creating a category winning company. I found his insights on how needs evolve and how that relates to markets to be one of the best framing:

2)
- The number of human needs that can be satisfied is fewer than needs that can't be satisfied
- Within the set of needs that can be satisfied under our current state of technology, ROI-positive conditions are far less than ROI-negative needs

3) - Needs that can support a commercial operation are far less than needs that can't
- Lastly, the number of needs that can allow a company to survive competitively is the smallest bucket

Visually, it can be seen as

4) From the standpoint of an individual, their needs manifestation are constantly changing. Wang invokes the notion of Maslow's hierarchy by noting when basic needs such as hunger are unmet, the higher-level needs of altruism and self-expression are not as strong.

5) Therefore, needs are everlasting, but the degree to which they are reflected on the broader community is dependent on the underlying attributes and wealth levels of society at that time.

6) When people talk about needs, it's usually centred around "I" and not considering the societal infrastructure, wealth, education, cultural zeitgeist, etc. Changes in the macro conditions bring changes to a different manifestation of individual needs and, eventually population.

7) On a human desire level, needs are already set - the need either exists or doesn't. But the intensity, prevalence, and feasibility are affected by many factors.

8) Changes in factors such as technology mean that the feasibility of satisfying those needs changes. This encourages greater intensity of the needs in the general population.
Some needs may be amplified by the changes in the social environment, wealth level, human knowledge.

9) A key takeaway is to know that TAM is always bigger than what we see today. Still, it requires a suitable business model and technology to make it commercially viable.

10) Wang proposes that to understand the true size of certain TAMs, we should go back to the path of human development, which is the specialisation of labour focused on things we used to do ourselves.

If you're interesting, I summarised more of Wang's insights in this week's edition.

lillianli.substack.com/p/the-chinese-…

Also people seemed to really like this so.... part II in the works!