Another internet giant has retired.

A bit fast, but not unexpected.

On October 20th, Su Hua, the co-founder of Kuaishou, resigned as chairman. In the internet world, another frontline founder has stepped down.

Su Hua's retreat had actually been foreshadowed. Two years ago, after leading Kuaishou to go public for eight months, the 39-year-old Su Hua handed over the CEO position to Cheng Yixiao. Since then, this round-faced, slightly chubby man with thin-framed glasses has rarely appeared in public.

And from that moment (starting on October 29, 2021), Kuaishou also embarked on a new starting point. In the second quarter of this year, Kuaishou achieved profitability for the first time in its history. However, Kuaishou still faces fierce competition in the e-commerce world, and Cheng Yixiao cannot afford to relax.

Su Hua's departure did not cause much discussion. After all, before him, more than ten founders of large internet companies such as Jack Ma, Colin Huang, Zhang Yiming, and Wang Xiaochuan had successively retreated to the background.

The once bustling internet world has already quieted down. As the soul of the company, the retreat of the founder reduces the personal color of the company and makes it more professional. The big shots who have plunged into the sea of people and immersed themselves in research and learning are also looking for and creating another story.

Resignation

On October 20th, Kuaishou announced in a statement on the Hong Kong Stock Exchange that Su Hua had resigned as chairman and would be succeeded by CEO Cheng Yixiao, with the adjustment taking effect on October 29th.

Although he still serves as an executive director and a member of the remuneration committee, stepping down as chairman means that Su Hua has officially exited Kuaishou's core management team. This "first stock of short video social networking" that has been listed for more than two years is ushering in the iteration of its core management team.

Behind the rise of every internet giant, there is a helmsman who controls the direction. For Kuaishou, Su Hua played such a role. It can be said that without Su Hua, there would be no Kuaishou today.

Looking back at Su Hua's rise, it was a collision of opportunity and ability. Su Hua graduated from the School of Software at Tsinghua University and is a typical tech guy. He has worked for Google China and Baidu as an engineer. Before Kuaishou, Su Hua had multiple entrepreneurial experiences and achieved financial freedom.

In 2013, Su Hua, who wanted to continue his entrepreneurial journey, was introduced to Cheng Yixiao, the co-founder of GIF Kuaishou established two years earlier, by an investor. The two hit it off and founded the later Kuaishou short video platform. Cheng Yixiao was responsible for the product, while Su Hua was responsible for the strategy. As a result, Kuaishou established a dual-core management mechanism, and the two of them together put Kuaishou on the fast track.

In 2021, Kuaishou successfully went public and became the "first stock of short video social platforms." Su Hua's net worth soared as a result. According to the Hurun Global Rich List released by the Hurun Research Institute in March 2022, Su Hua ranked 572nd with a net worth of 36 billion yuan.

Su Hua's departure was not sudden. Two years ago, Su Hua stepped down as CEO of Kuaishou and was succeeded by Cheng Yixiao. According to insiders, Su Hua had gradually withdrawn from Kuaishou's daily management since then.

During Cheng Yixiao's two-year tenure as CEO, Kuaishou began to reduce costs and increase efficiency, and its performance also turned from loss to profit. Earnings report shows that in Q2, Kuaishou's net profit was 1.48 billion yuan, a year-on-year turnaround, far exceeding market expectations of 180 million yuan, and a significant improvement from the loss of 3.18 billion yuan in the same period last year. This is the first time Kuaishou has achieved profitability since its establishment, and it is achieved on the basis of previous losses of hundreds of billions.

This also means that the transition of Kuaishou's management team may be smooth, and in this case, Su Hua's departure from the board of directors may not cause significant fluctuations in Kuaishou's operations.

Although Su Hua has resigned, his voting rights will not change. As of June 30, 2023, Su Hua's shareholding in Kuaishou is approximately 9.86%. According to Kuaishou's financial report, his voting rights in shareholder resolutions, excluding matters reserved to the board of directors, are approximately 38.01%. Cheng Yixiao's shareholding in Kuaishou is approximately 8.82%, and his voting rights in shareholder resolutions, excluding matters reserved to the board of directors, are approximately 30.58%.

Kuaishou stated that as of June 30, 2023, Su Hua and Cheng Yixiao are the ultimate controlling shareholders of the company.

As for Su Hua's future direction, one main direction is investment. It is understood that even during his time at Google, Su Hua was very interested in AI and had studied machine learning. Not long ago, he also appeared on the list of early investors in AI giant companies, which has now been acquired by Meituan.

AI is closely related to Kuaishou's business. As a short video platform with over 300 million daily active users, Kuaishou is undoubtedly one of the most important scenes for the application of AI technology. From this perspective, Su Hua may still bring new possibilities to Kuaishou's business.

However, with Su Hua's departure, all the pressure is now on Cheng Yixiao. The challenges that Kuaishou faces are not easy.

The ceiling of Kuaishou's business depends on its user base. However, as internet user growth reaches its peak, Kuaishou's user growth is inevitably slowing down. In addition, in terms of commercialization, the competition in the e-commerce market is becoming increasingly fierce, and Kuaishou needs more powerful strategies to maintain high growth.

Compared to its initial market value of over a trillion, Kuaishou's stock price has plummeted. As of the close on October 20, Kuaishou's stock was trading at HKD 56.55 per share, with a market value of only HKD 246.293 billion, a decrease of over 80% from its peak.

Currently, many investors have a wait-and-see attitude towards Su Hua's retirement, feeling that it is at least better than frequent personnel changes.

Bai Wenxi, Chief Economist of IPG China, believes that Su Hua's retirement as Chairman of Kuaishou can be considered a "successful achievement". Now, Kuaishou's operating team has grown, and various businesses will continue to be managed by the heads of each business department.

In Bai Wenxi's view, Su Hua's departure is an important turning point for Kuaishou. In the future, the company's strategy and development direction will be determined by the new leadership.

The board of directors of Kuaishou stated that having the same person serve as Chairman and CEO ensures the consistent leadership in advancing long-term strategies, further enhances the group's monetization capabilities, and optimizes the group's operational efficiency.

The Trend

It seems that Su Hua's retirement is just following in the footsteps of the big brothers. The first to lead the trend of internet giants retiring was Jack Ma. In 2019, at Alibaba's 20th anniversary celebration, 55-year-old Jack Ma stepped down as Chairman of Alibaba's Board of Directors and handed over the reins to Zhang Yong. At that time, Jack Ma said, "Today is not Jack Ma's retirement, but the beginning of institutional succession. It is not an individual's choice, but the success of the system." In 2013, Jack Ma had already stepped down as CEO of Alibaba.

Since then, younger internet tycoons have also started to retire. In March 2021, Pinduoduo founder Huang Zheng stepped down as Chairman of Pinduoduo, and was succeeded by co-founder and CEO Chen Lei.

In May and November 2021, ByteDance founder Zhang Yiming also stepped down as CEO and Chairman of the Board of ByteDance, and was replaced by co-founder Liang Rubo.

Including Su Hua, the retirement of these internet tycoons generally has several common points.

They all retired between the ages of 38 and 55, when they were at the peak of their careers. Before retiring, they often planned for many years and gradually delegated power.

The reasons for their retirement are all related to the industry's regulatory environment. A person who has worked for multiple internet giants said that the retirement wave of internet tycoons is due to a combination of policy environment and the development needs of the companies. After rapid expansion in the early stages, internet companies have engaged in behaviors such as "choosing one out of two" and "suspected monopoly," which are not conducive to a fair and orderly market environment. In recent years, Ant Group, Tencent, and Meituan have all been heavily fined, and platform regulation has become increasingly stringent.

In addition, for long-term development, companies also need to break free from dependence on individuals and establish modern corporate governance systems. This is also the basis for the founders' retirement.

After retirement, these tycoons often focus on technology and public welfare, grasping and exploring the company's future strategic direction.

Before retiring in 2019, Jack Ma stated at the Global Conference on Women Entrepreneurs that retiring from Alibaba does not mean he will stop being an entrepreneur. "Alibaba is just one of my dreams. I still have many things to do, and I hope I can still have passion when I am 75 years old."

After retiring, Jack Ma has been involved in public welfare, agriculture, education, and other fields. He has also recently been exploring new energy, which is somewhat related to Alibaba's future.

Huang Zheng explicitly stated that he is looking for a new future for Pinduoduo. He said that with the increasingly fierce competition in the industry, changes must be made by taking action on more fundamental issues. If Pinduoduo wants to ensure high-speed and high-quality development in 10 years, it is the right time to explore some things now.

"As a founder, it is more suitable for me to step out and touch the stones on the road 10 years from now," Huang Zheng said. "I want to do research in the fields of food science and life science."

When Zhang Yiming stepped down, he wrote in an internal letter to all employees that as the company's founder, he would focus on long-term important matters such as vision strategy, corporate culture, and social responsibility.

Jia Jinghua, a telecommunications and internet analyst, believes that strictly speaking, these internet tycoons who stepped down as CEOs are only superficial retirements. In fact, they still hold power in the company, but are not heavily involved in daily decision-making. The reason for stepping down as CEO is twofold: to cultivate successors and to free up more energy to think about the company's development direction and take the company to new heights. Take the example of Jack Ma, the founder of Alibaba. He is still the invisible king of the Alibaba empire. As Alibaba faces competition from ByteDance, Meituan, Pinduoduo, and others, the competition in the internet industry is becoming increasingly fierce. However, it is still Jack Ma who is taking charge and overseeing the overall situation.

In June of this year, after being retired for three years, Jack Ma returned to China. Soon after, Alibaba underwent its largest organizational transformation in history, with the "One Divide Six" restructuring. The highest position in Alibaba was also handed over from Chairman Zhang Yong to Jack Ma's spokespersons, Cai Chongxin and Wu Yongming, who took over as Chairman and CEO.

Zhang Yiming has not completely let go of the affairs of ByteDance, especially when it comes to TikTok-related matters. He is still involved in the handling of these issues.

Wang Lixin, a professor at Beijing University of Posts and Telecommunications, pointed out that nowadays, the founders of Chinese private enterprises are retiring earlier and more frequently. Recently, Cai Haoyu, the 36-year-old chairman of miHoYo, also stepped down and handed over the reins to his entrepreneurial partner.

In the previous generation of entrepreneurs, figures like He Xiangjian, Liu Chuanzhi, and Wang Shi fought until their old age, only relinquishing their power in their sixties or seventies. And there are still many giants like Ren Zhengfei, Li Dongsheng, Cao Dewang, and Dong Mingzhu who are still active in the frontlines.

In contrast, in today's internet industry, it is inevitable to feel a sense of nostalgia and regret as the founders retire in their prime.

Times create heroes, and heroes also need to adapt to the times. When the tide of the era surges and the environment changes, these internet industry giants have chosen to retire while still at their peak. However, most of them are destined to continue their involvement, whether overtly or covertly, alongside successors like Cai Chongxin, Wu Yongming, Chen Lei, and Zhang Lidong, collectively stirring up new trends in the internet industry.