This is a USB drive developed by my company. It can not only replace floppy disks but also open up the mobile storage market." He Zhengcheng presented the lab-produced USB drive.
"Such a small device…" Liu Chuanzhi trailed off.
"Do you have a computer here with a USB port?" He Zhengcheng asked.
"Yes, the computer is over there. Let's go together," Liu Chuanzhi replied.
"Alright!" He Zhengcheng agreed.
The computer was turned on, running Windows 98. The USB drive had a built-in driver that installed automatically, and it was ready to use shortly after being plugged in.
"Mr. Liu can freely copy any file no larger than 32MB and then copy it to this USB drive," He Zhengcheng instructed.
Liu Chuanzhi didn't say much and immediately started operating.
He Zhengcheng watched. When the copy was halfway done, he directly pulled out the USB drive.
"Hey!" Liu Chuanzhi exclaimed.
"Mr. Liu, do you think this USB drive is damaged?" He Zhengcheng asked, knowing that floppy disks of that era not only had very small capacities but also didn't support hot-swapping.
"Your USB drive isn't damaged, is it?" Liu Chuanzhi questioned.
"Mr. Liu can try again," He Zhengcheng said, handing him the USB drive once more.
The USB drive, of course, was fine.
"This device of yours is very advanced and can solve many problems," Liu Chuanzhi commented.
"Mr. Liu should be quite familiar with Moore's Law, right? How long do you think it will take for a USB drive with a capacity of 1G to appear? If this USB drive can be mass-produced now, its market price should be around 500 rmb. Mr. Liu, how many years do you think it will take for the price of a USB drive to drop to around 100 rmb?
The application scenarios for USB drives are very broad. They can not only meet the daily office needs of enterprises, such as printing files and transmitting electronic documents like contracts, but also the daily life and entertainment needs of ordinary people. For example, those who can't afford a computer but can use one might need such a USB drive to save their office documents, code, and pictures. In the future, it can also be extended to music, videos, and so on.
Of course, while bringing convenience, it will inevitably cause a lot of trouble. If enterprise management is poor, many confidential business information might be stealthily obtained by industrial spies using USB drives," He Zhengcheng said, hinting at something.
"I'm not good at judging the market prospects of USB drives. Is the technical difficulty of achieving it significant?" Liu Chuanzhi asked.
"The technical difficulty is not great; large companies can easily imitate it. However, I have already entrusted patent lawyers in Silicon Valley to conduct detailed patent applications worldwide. I can guarantee that currently, no enterprise or individual has applied for similar patents," He Zhengcheng stated.
"The difficulty of imitation is not great, and it can easily be infringed upon. This is a bit troublesome, as its commercial value is limited," Liu Chuanzhi observed.
"I came here this time to seek cooperation. I have two plans. One is to sell the patent to Lenovo. The other is to seek contract manufacturing from Lenovo.
If Lenovo manufactures for me, I have roughly designed a complete commercial promotion plan. In Daxia Country, it's hard to manage small companies, but I will definitely launch professional lawsuits against infringing large companies. Regardless of whether we win or lose, we will first launch a public opinion offensive, initiating lawsuits against all infringing enterprises nationwide.
Then, through advertising, we will keep the media continuously focused on this lawsuit. The final outcome is no longer important; by then, my new brand will have already become a nationally renowned brand… Similar methods will be used overseas. I even thought of an interesting advertisement, portraying my company as a Daxia Country tech enterprise, and then a Daxia person goes to America and stealthily steals their nuclear technology data using a USB drive, thereby creating a 'Daxia Threat Theory' scare. Amidst the huge discussions and highly probable patent litigation cases, the company's brand will quickly gain acceptance.
Of course, during this period, I will invest huge amounts in publicity and promotion," He Zhengcheng explained.
"Very interesting idea!" Liu Chuanzhi commented.
"How much do you think such a globally renowned brand would be worth then?" He Zhengcheng asked.
"This would require a lot of capital, wouldn't it?" Liu Chuanzhi responded.
"I have 100,000 shares of eBay, and the lock-up period for our investment in eBay is almost over. If I cash out, I can get at least 20 percent profit," He Zhengcheng said.
"I can confirm this!" Xu Xin added.
"I almost forgot, you are not short on money," Liu Chuanzhi remarked.
"No one ever has too much spare money, otherwise I wouldn't be trying to make money with USB drives. My method is certainly not perfect, but with capital, one can naturally find suitable talent. I don't intend to run a century-old enterprise; in two or three years, this company will be operating towards listing on the Hong Kong Stock Exchange or NASDAQ. By then, even if I sell the shell company, I can make at least several hundred million.
But that would take up too much of my time, and there are some uncertainties. That's why I want to sell this patent," He Zhengcheng explained.
"Cheng Zai actually doesn't have much confidence in this deal; his expectations and the price you can offer have some discrepancies. However, our investment in Lenovo was made with Cheng Zai's support and promotion," Xu Xin clarified.
"Mr. He is very optimistic about Lenovo?" Liu Chuanzhi asked.
"Firstly, I am optimistic about the development potential of the PC industry in Daxia. Secondly, I am optimistic about the development of Daxia Country. Lastly, I believe Mr. Liu is a very excellent professional manager in Daxia Country. Of course, if Mr. Liu were the owner of Lenovo, perhaps he would do even better," He Zhengcheng said sincerely. In fact, he had always been demonstrating his candor.
"Haha, I'll be content if I can manage Lenovo well. What is Mr. He's asking price for the USB drive patent?" Liu Chuanzhi asked.
"10 million US dollars!" He Zhengcheng declared.
"This price is a bit expensive. We need time to consider," Liu Chuanzhi said, neither refusing nor agreeing. Ten million US dollars, nearly 100 million rmb, was not a decision that could be made immediately. Of course, if it were Liu Chuanzhi a few years later, after establishing his dominant position in the domestic market, he might be more direct.
"No problem, I understand. This is indeed a bit high!" He Zhengcheng acknowledged.
"I think since Cheng Zai is very optimistic about Lenovo, couldn't you use Lenovo shares as part of the transaction?" Xu Xin suggested.
"Yes, using cash is a bit difficult; using stock would be easier to pass," Liu Chuanzhi agreed.
"I have no problem with that," He Zhengcheng said. He was bringing back 2 million US dollars to buy some Lenovo stock to give to his younger siblings for the New Year.
"Then we will notify you after our company has thoroughly researched it!" Liu Chuanzhi concluded.
"Of course. Here is the USB drive; I'll leave it with you. If you take it apart for reverse engineering, it might not even take three months to figure it out. Also, there are two other documents: one is my global patent application file; the other is a market survey I conducted in several major cities in America. I am very sincere. Shanhai Capital hopes its cooperation with Lenovo can last ten years or even longer, so if you have any questions about this cooperation, I will not conceal anything," He Zhengcheng offered.
"How much did you spend on developing this?" Liu Chuanzhi asked.
"All things considered, it's about 5 million Hong Kong dollars. Actually, if I established a company to operate this project, I would also have an advantage. I met Khosla and John Doerr of KPCB at NASDAQ; they are Compaq's venture capitalists. Through them, I met Compaq's current president and established a foundation for cooperation with him," He Zhengcheng explained.
"…" This is truly an extraordinary person, Liu Chuanzhi mused. The business world has always been full of deception, but trustworthy people are more likely to get opportunities for cooperation.