Lao Yu opened a column on "Algorithm of Life" in "Get". In an article, Lao Yu talked about how choice is more important than hard work and gave two very thought-provoking examples. .

One example is an example of a company choosing a track, and the other is an example of an individual choosing a track.

The corporate example refers to the choice of Kodak Company. In 1994, Kodak's business was strongly impacted by Fujifilm in the Chinese market and was losing ground. According to the conventional play style, there is almost no hope of turning around. Therefore, Kodak made a super move in China: investing US$1 billion to acquire Chinese film companies across the industry.

This big move is indeed powerful. All seven companies in the Chinese film industry have joint ventures with Kodak. Kodak's stock price has soared, and its share of the Chinese market has surpassed Fujifilm's, with a share of 67%.

It seems that Kodak is very successful, but at this time the global camera industry is undergoing a huge change, and digital cameras are on the rise. In 2002, digital camera sales surpassed traditional cameras for the first time. Kodak was the first to invent the digital camera as early as 1975, but because it focused on current cash flow, it still stuck to the traditional film track for more than 30 years.

Kodak’s big move in China won every battle but lost the entire campaign.

No matter how strong Kodak was and how hard it worked, it chose the wrong track for competition, and these efforts only exacerbated its defeat.

A personal example is that if you want to choose a swing sport, you'd better imitate the tennis star Federer rather than the badminton champion Lin Dan.

Why? Also ranked among the top ten, tennis players earn 10-20 times more than any other racket players.

You see, Lin Dan is definitely talented, trains very hard, has a good record, and is considered a top badminton player. However, he could not overcome the disadvantages of the "industry" of badminton compared to the "industry" of tennis. Even if you become number one in the world, your income is far less than that of Federer.

As an individual, even if my professional level is very high, I lost at the starting point because I didn’t choose the right track.

A study by McKinsey & Company shows that more than 70% of companies are rising as industry trends rise. Industry and region are the two most important factors that determine a company's profit. A company's profit curve in the industry and region moves up and down, and the room for rise and fall does not exceed 25%.

Choosing an industry is like choosing whether to take the elevator or climb the stairs. As long as you sit on it, you will most likely go up and down with the elevator.

It is not only a matter of companies choosing a track, but also personal choices.

As individuals, how do we choose a track that suits us?

1. Find industries that are more valuable in the future

We must have some forward-looking vision, not just limited to our own cognitive scope, which requires continuous learning and think.

Just like the book "Inevitability" written by Kevin Kelly, many people who read it said that they saw the future, because the author summarized dozens of his own experiences in this book The observation and analysis of science and technology in the past few years has brilliantly commented on the inevitable trend of current science and technology development, providing a forward-looking vision and guidance for the development of the science and technology industry.

2. Find companies that can make money in the future

What is a good company? That is the ability to continue to grow.

Who do you think is more valuable between the New York Times and Twitter, the American equivalent of Weibo?

Both companies are very powerful, with thousands of employees, and both are industry-leading information channels. Also in 2012, the New York Times made $133 million, while Twitter was losing money.

Although the New York Times is more profitable, Twitter, which loses money, is more valuable. In 2013, Twitter went public with a market value of US$4 billion, more than 12 times the market value of The New York Times.

Why is this?

The value of a company today is the sum of the profits it will create in the future, that is, the future cash flow is converted into today's value. Therefore, a valuable company is one that people believe will have a high future rate of return.

Whether you make money or not is not the most important issue now. If you can choose to delay gratification, you may gain huge gains. Just like Amazon, it lost money for the first 20 years, but once it started making money, it made a lot of money.

Some companies are making money now, but that doesn’t mean they will make money in the future. For example, although the New York Times is making money now, the entire newspaper industry is on a downward trend and may not make money in a few years. Although Twitter lost money at the time, it may make a lot of money in the future.

3. Find an industry that will never change

If an industry has existed since ancient times, and common sense determines that it will probably exist in the future, then this industry can also be chosen. For example, the catering industry, because human beings need to eat no matter when they arrive.

4. Find an industry that can give full play to your talents

If an industry can allow your talents to be displayed, even if you cannot achieve fame and fortune in the worldly sense, you can still work in it. This industry gives you a sense of accomplishment and satisfaction, so you can choose it.