- How did Alibaba kick eBay out from China?
- How did Groupon help and destroy small businesses?
- How did Lenovo revive Dell and HP?
They all share a common strategy.
I am Fanny Lawren.
In Ancient Wisdom for Everyone, I will share with you how exceptional leaders have used ancient Chinese strategies and philosophy to win in battlefields and reach business goals.
More importantly, I will show you how to apply such wisdom in your everyday life so YOU can be a better CEO of your life.
In this episode, I am going continue our discussion on the Self-Injury Stratagem (苦肉計 Kǔròujì).i.e. Inflict injury on oneself to get the result.
The Self-Injury Stratagem is one of the most common yet not quite understood thinking approach. To help you understand the stratagem and learn how to use it, I’d show you some historical examples, business case studies and applicable life scenarios.
Since we have a lot to cover, I broke it down into two episodes. What you are listening now is Part II. If you have not listened to Part I, I highly recommend you to do so. You can do it before you continue with this episode or after you finish it. You should be able to follow either way. Just don’t miss it.
In the last episode, we went over 3 very dramatic historical examples, and 3 out of the 6 ways of using the stratagem in business with more than a dozen business case studies, including Macy’s, Amazon, Johnson & Johnson.
In this episode, I will tell you the other 3 ways of using the stratagem in business. This time, we will go over how Apple, Uber, Alibaba use it. I will also show you a couple applications in life scenarios.
Stay with me to learn more about the self-injury stratagem.
Here is the original quote in Mandarin:
人不自害，受害必真。假真真假，間以得行。童蒙之吉，順以巽也。(Rén bù zìhài, shòuhài bì zhēn. Jiǎ zhēn zhēn jiǎ, jiān yǐ dé xíng. Tóngméng zhī jí, shùn yǐ xùnyě.)
Now in Cantonese, 人不自害，受害必真。假真真假，間以得行。童蒙之吉，順以巽也。
Now English translation: People don’t inflict injuries on themselves. Any injuries would be perceived as unintentional. When the false looks real, sowing discord can be implemented. Earn the trust. Success will follow.
If you don’t know what I have just said, don’t worry. You are normal. If you do, impressive! Either way, let me explain.
In the business world, the injury we typically refer to is “losing money.” If you have the plan right and executed it well, the money spent would simply be a good “investment”.
We all understand we have to invest to make some return. In general, the first investment would most likely go to purchasing equipments, supplies and in some cases ingredients. Then we hire talents — full time, part time, freelance. Those are not self-Injury.
Self-Injury in business is to give away before getting return. In Chinese, we say “if you want to receive, give first.” (欲取先予 Yù qǔ xiān yǔ).
In the last episode, I explained to you three types of self-injury in business. I would say it is like “Payment in advance” but with no guarantee you will get anything back. So, be very careful when executing the plan. Do all the calculations first. Those three I talked about were:
- Give here and gain there
You lose money on a “more desired” item to attract people to buy other more profitable items.
- Give for loyalty
Classic example is Amazon Prime. You promote a money-losing service so to attract customers stick to your products and services.
- Give to earn trust
It is not like paying influencers for endorsement. These are actions companies take to reinforce their image.
Now, let’s go over the other three.
Biz App #4: Give Free Trial
One way to acquire new customers is through FREE trials. Many subscription based businesses do that, such as gyms, magazines, wine clubs, meal plans. Free trials are particularly important for introducing new products.
Apple gave out macs to schools when they first came out. They still donate to schools. When the kids get used to Macs at school, guess what they would like to have at home?
Do you remember when Dropbox was introduced more than a decade ago? That was way before people even talked about “the cloud.” Most people were skeptical of trying it. But it was free, so I tried. I got more space for every new referral sign-up. It was easy. Just send them the link to the shared file. They would likely join. After I got so used to Dropbox and all my friends were on it already, I started to pay to get more space. Did that happen to you, too?
How about Uber? You got free credit when a friend referred you. You tried. You liked it. You wanted more free rides. So, you sent links to other friends to try. And the snowball starts.
What about the small businesses? What can they use to promote free trial? Groupon! Give super discounts to new customers. It works the best for local stores and services. BUT it is expensive since Groupon charges quite a bit. So, you make it clear that the offers are valid for new customers only. But how do you verify? If you can’t, be extra careful. You want to make sure your offer is big enough to attract new customers, but still make sense in case repeated customers use it.
When the injury is too deep, you may bleed to death. On the other hand, if the injury is not big enough to show, it obviously will not work.
There is another good reason to use Groupon. Say you are a chef and you want to buy a new stove. But you don’t have money. Use Groupon. They give you the money before the customers come redeem the vouchers. So, if you do the math right, you can practically get a no-interest loan. Not exactly self-injury, but it could be a good deal. Think about it.
Biz App #5: Give To Grab Market Share
If you keep giving free trials, you are practically burning money. Why would anyone do that? Actually it is not uncommon, especially during the dot com era.
For instance, when eBay entered China in 2002, Alibaba launched a competing consumer-to-consumer (C2C) auction site, not to make money, but to fend off eBay from taking away Alibaba’s customers. It offered free listings to vendors and provided great services.
eBay, on the other, sent over non-Chinese executives to start the business in a country that has a complete different business environment and consumer behavior. It didn’t take long before eBay left. Not only did Alibaba outsmart them in every aspect, they had a lot of money. They could afford deeper injury than eBay.
What if your financial backup is not as strong as Alibaba? Well, you will have to have an absolutely great plan to grab market shares quickly. Here is an example.
Lenovo declared “a summer of massacre” in 2004. It tried to take out powerful rivals such as Dell, Hewlett Packer, and Toshiba, as well as local competitors, by launching a huge promotion with over a hundred kinds of products. Meanwhile, the company’s board of directors “injured themselves” by slashing the compensation for its members by an average of 40 percent and lowering CEO 楊元慶 Yáng Yuánqìng’s pay by half. Business revived and set a new high record—something the company had not managed to do in over two years before this “self- injury” program.
When you want to grab market share, some sacrifices have to be made. For many entrepreneurs, the sacrifice usually includes family time. Well, it is inevitable. Just be mindful. Don’t overkill.
Biz App #6: Give To Prove
Self-injury is one of the best ways to demonstrate great quality. Car manufacturers demonstrate what happened when there is a crash. Same for phones and many electronic devices. IKEA displays in their show rooms a robot non-stop beating up an item to prove its durability.
Manufacturers discard products that do not meet their standards. It could be costly, but then your excellent quality allows you to charge more.
Some prestigious brands — like those on 5th Ave NY and Rodeo Drive LA — destroy their products after season, instead of offering big discount. They do not want to cheapen their products.
You see, self-injury can keep your price high if you do it right. But then in the case of designer brand, I think it is such a waste. Totally against environmental protection. They should give the products to me. I promise I will not sell them at discount.
Self-injury stratagem is pretty popular in films. In many action movies, we see men fight very hard for their loved ones. In return their families forgive them for whatever they did before, and they live happily ever after.
And in many dramas, women cry or threaten to commit suicide to get their men to return their love. Don’t ask me if it is right. For sure they are stereotypical. Anyway, can you see now that these are self-injuries too? They are.
Argumentatively, the most common self-injury practice is the fact that kids misbehave to get their parents’ attention. Babies can’t speak. They cry to signal adults they need something. Then they notice adults would run to them when they fall. Later they learn parents come to school only when they are called to the principal’s office. So, the best way to get the parents know they exist and that they need love is by rebelling.
Okay, not all families are like that. Thank goodness. Do you get the point here? To all parents, make sure your kids do not need to self-injure themselves for your attention.
The master of self-injury strategy in the recent history, I would say, is Mahatma Gandhi. He was an Indian lawyer, anti-colonial nationalist, and political ethicist. He employed nonviolent resistance to lead the successful campaign for India’s independence from British rule, and in turn inspired movements for civil rights and freedom across the world.
Nonviolent resistance doesn’t necessarily mean self-injury. But a lot of time, it does turn into self-injury, such as jail time. During his protesting years, Mohandas Gandhi spent a total of 2,338 days in jail.
Gandhi’s nonviolent movement worked because he accepted jail time. He did not fear jail. He knew that serving time would help his cause. Having their leader in jail strengthened Gandhi’s followers and made them more passionate about working for India’s freedom.
Placing Gandhi in jail also frustrated the British because his incarceration only served to display the brutality of the British. This brutality caused foreign countries to pressure the British to leave India. The effects of Gandhi’s nonviolent acceptance of jail time on his followers and on the British combined to bring independence for India.
In addition to jail time, his fast-to-death protests are, to me, insane. Total of 17 times. Longest 21 days. I can barely do 3 days. He is an amazing guy. Search him up to learn more.
You might have or will come across the term “Self-injurious Behaviors (SIBs).” It is not the same as what we have been talking about here.
Lost in translation. Literal translation of 苦肉計 is Pain Flesh Stratagem. Reach the goal by getting pain on the flesh, figuratively speaking. It is commonly translated as Self-Injury stratagem.
Self-injurious behavior, however, is a psychiatric condition. Patients deliberately injure their own bodies without the aid of another person severely enough to cause tissue damage or scarring. That’s the definition by National Institutes of Health in the U.S.
Such behaviors may be exhibited by people with developmental disabilities. It is also a reflection of emotional distress and is usually an indication that a person is struggling to cope with overwhelming feelings.
These patients do not have a goal for their self-injurious behaviors. They just cannot control themselves. On the other hand, the Self-Injury Stratagem is a rational outcome with some levels of planning and expectations.
I think you can tell the difference. If it is not clear to you, please rewind and listen to this show from the beginning. That should help.
Back to the Self-injury Stratagem, please know that self-injury can become self-destruction if you don’t do it right. Before implement the stratagem, you should ask yourself…
- Does the target care (about you or the product)?
- Do you have a viable plan with all the follow-up steps and the what-ifs?
- Is the goal worth taking the risk?
- Do you have enough backing?
- How much can you afford to lose?
- Do you have a Plan B?
- What is your Exit Plan?
- Will you regret doing this?
I don’t mean to scare you away. Go for it if you think it is right for you.
- Have a plan and know when you should stop before it is too late.
- Monitor the situation, be flexible to make changes.
- No pain. No gain. No risk. No return. Just be careful.
This concludes our discussion of Self-injury Stratagem (苦肉計 Kǔròujì)
It is from an important Chinese military text The Thirty-Six Stratagems (三十六計 Sānshíliù Jì).
Self-injury Stratagem is the #34. Would you like to hear about the other 35? Please let me know.
People always confuse The Thirty-Six Stratagems and The Art of War (孫子兵法 Sūnzi Bīngfǎ)
They are two different books which share some similar wisdom.
In the Western World, The Art of War is probably the most popular Chinese military text.
The book was dated roughly in the 5th century B.C., i.e. more then 2500 years ago. It was translated intro French in 1772, and English in 1905. It was called The Book of War.
The Art of War has big influence on both Eastern and Western military thinking, business tactics, legal strategy, lifestyles and beyond. It had inspired Napoléon, Máo Zédōng and many others. It is used as instructional material at the US Military Academy at West Point.
So, of course, I have talk about it in this show Ancient Wisdom For Everyone. In next episode, I will talk about Chapter One of The Art of War — Laying Plans (始計篇 Shǐjìpiān). It says all plans should take these 5 factors and 7 conditions into considerations. What are they? Stay turned.
Before we wrap, let me remind you once again: This episode is the Part II discussion of Self-Injury Stratagem. You should listen to Part I so to understand it better. Please go ahead listen to the first episode if you haven’t. Even if you have, listen to it again.
I am Fanny Lawren — the host and the producer.
I hope you like this show and found it helpful. Tell me what you think. Ask me questions. Just go to AncientWisdomForEveryone.com. I would love to hear from you. You can also find the transcripts there.
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This show is made possible by the BRIC Podcast Intensive Program 2021. Special thanks to instructor Jen Miller for the guidance.
BRIC – Building Brooklyn’s Creative Future. For more information, please go to BricArtsMedia.org