Traveling back to 1977

Chapter 688 Why Not Invest?
Although the timing is not yet right for the Chinese character card to enter the domestic market, it is only temporary.

Whether the decision is to import or to develop it domestically, once China begins to pay attention to the personal computer sector, that will be the time for Chinese character cards to take off.

Thinking of this, Chen Fan couldn't help but ask, "Uncle, how did you negotiate with the domestic authorities regarding patents?"

Zhou Zhengdong leisurely picked up his teacup, took a sip, and said without looking up, "We didn't talk about it."

Chen Fan blinked. "Huh?"

Zhou Zhengdong smiled and said, "I've had contact with people here. In terms of intellectual property, they can basically be divided into two types: the first type doesn't understand it at all; the second type understands it but doesn't value it."

He looked up at Chen Fan and chuckled softly, “Actually, I can understand this situation very well. Back then, the United States didn’t value intellectual property rights from the very beginning either. In other words, there was a period when they deliberately indulged it.”

Otherwise, how could they use technology invented by European countries for free?

It was only later, when capital and markets created demand, that intellectual property rights gained importance and became one of the most important rules of the game in Western countries.

He spread his hands and said, "But right now, China is poor and backward in technology compared to the West. If we strictly control intellectual property rights at this time, it will actually be disadvantageous."

He paused for two seconds, picked up his teacup, took a sip of tea, lit a cigarette, and frowned as he gently exhaled a puff of smoke. "Regarding this situation, I will carefully consider how to communicate with Western companies. Perhaps, the 'market' will be a decisive factor."

After he finished speaking, Chen Fan took a deep breath, his eyes darted around, and then said to Zhou Yali, "The Chinese character card can only function if it is based on a computer. You should keep an eye on the expansion of the Chinese character card in overseas markets, but at the same time, you should also pay attention to the development of personal computers in China."

We can ignore patent issues, but we can't afford to miss out on everything.

Zhou Yali instantly understood his meaning: "When China starts importing personal computers on a large scale, or when the construction of personal computer factories begins, I will prepare to import Chinese character cards into the mainland. At the very least, I will form a joint venture with the mainland. Even if we cannot set up a factory, it would be fine to establish a dedicated agency company."

Given the current situation, she is unsure when she can open a foreign-invested factory, even a joint venture would be acceptable. Another issue is the technical capabilities and equipment required for the Chinese character card factory; she doesn't know if these can be resolved.

Although an announcement has been made and diplomatic relations have been established, the US has never said it would remove China from the list of the Coordinating Committee for Multilateral Export Controls (COCOM).

Well, surely no one doesn't know what Batumi does?
Therefore, neither Zhou Yali nor Zhou Zhengdong had any confidence in this matter, let alone the certainty of succeeding.

Perhaps only after giants like IBM or Motorola take the lead and set an example will other companies be able to follow suit.

Chen Fan rubbed his face, knowing that this was the only way the Chinese character card could be used for the time being.

Actually, it wouldn't matter if we couldn't set up a factory in China... well, from a domestic technical perspective, although the Chinese character card is a patent of an American company, if we were to actually produce it... to use Zhou Zhengdong's words, what is a patent anyway?!

So he didn't bother to dwell on it; he figured everyone would just have to rely on their own abilities when the time came, and there was nothing more to say.

As long as this patent is held in hand, when the Internet era arrives, the Chinese character card and the technological achievements resulting from future iterations can naturally be transformed into the company's foundation, bringing huge profits.

It would be ideal if a domestic company could produce Chinese character cards without authorization and develop its own technology.

When China begins negotiations to join the WTO and intellectual property rights become essential, a single lawsuit will automatically transfer all relevant technological achievements of all manufacturers to their own company.

People who can see the future are just that calm.

In contrast, Chen Fan valued something else more.

He looked at Zhou Yali and asked, "How's the multi-protocol router thing going?"

Upon hearing this, Zhou Yali immediately smiled. "After completing the design of the Chinese character card, Dr. Engelbart immediately launched the research work for this project and assembled a team of more than 30 people."

With the financial support from the sales revenue of the Chinese character cards, the research went very smoothly.

Before we came, he told me that the progress was very fast, and that product development could be completed in as little as six months, or at most a year.

She paused for a moment, a hint of hesitation flashing in her eyes, "As for the promotion work, we don't have any clue yet."

Just as Dr. Engelbart invented the mouse, but it was shelved and eventually sold to Apple, even if he developed a multi-protocol router, it would not realize its value without application space.

Cisco became an instant success because both inventors were professors at Stanford University. One was the director of the computer center in the computer science department, and the other was the director of the computer center in the business school. They could use their positions to apply the invention to the Stanford University campus network.

Stanford University's status in the American computer science field is self-evident.

In this situation, the technology can be applied immediately and attract the attention of the industry and even the government.

If it were a small Chinese company, even if the inventor was the so-called father of the mouse, who would care?!
Chen Fan rubbed his head, exhaled a long breath, and looked up with a smile, "It's alright, let's get the stuff out first. As long as we have good stuff and hold the patent firmly in our hands, we won't have to worry about not finding someone who appreciates it."

At worst, we can hire a group of salespeople and go door-to-door to promote our products.

Yes, Stanford will be the first one.

After discussing work, Zhou Zhengdong, with one hand holding a teacup and the other a cigarette, said with a smile, "Xiao Fan, I have something to tell you, and I'd like you to be my witness."

Chen Fan flicked off the ash from his cigarette. "Yes, please go ahead."

Zhou Zhengdong turned to look at his daughter, then turned back and smiled, "Before, the Zhou family only had one heir, and that was Yali. Now your aunt is pregnant again, and she's had a check-up at the hospital, confirming it's a boy. So, the arrangements for the Zhou family group's assets need to be adjusted."

After pausing for two seconds, he continued, "The Zhou family is different from many Chinese families. Most Chinese families generally do not advocate dividing the family in order to maintain the integrity of the family."

But daughters will eventually get married, and they are also part of the family. So when your grandfather was still alive, he set a rule that daughters also have inheritance rights. When they get married, a portion of the family property will be divided and given to them as a dowry.

So, after confirming that Yali had a younger brother, I proceeded to divide the family assets into three parts. One part belongs to your mother, one part to Yali, and the last part is the business that the Zhou family retains.”

Hearing this, Chen Fan glanced at the two of them, silently took a drag of his cigarette, and remained silent.

He had said no last time, but Zhou Zhengdong insisted, and this part of the family property had not been handed over to him, so there was no need to say more.

Seeing that he didn't speak, Zhou Zhengdong smiled with satisfaction and continued, "Actually, almost 90% of the business has been retained, and what has been spun off are basically floating assets and unimportant business parts."

The company's business remains largely unchanged. The only change is that I have completely transferred the publishing company to Yali and injected ten million US dollars into it, which will belong to both of you, with each of you owning half the shares.

I've prepared a legal document. Your half of the shares will be temporarily held by Yali on your behalf, but the basic document clearly states that you are the owner of that half of the shares. It's not convenient to give you this document right now. I'll give it to you when you have the opportunity to go to the United States. You can open a bank safe deposit box to store it there, and that way you'll be absolutely safe.

On the other hand, I'm also thinking about funding the tech company you two co-founded. The Chinese character card and the multi-protocol router you mentioned are both housed in this company. That's my plan…”

At this point, Zhou Zhengdong clicked his tongue, hesitated for two seconds, and then continued, "You don't need to invest. Consider it an investment in the idea. I will cover all the funding needs for starting the company on behalf of Yali, which will be considered her investment. As for the shares, it will be 50/50 each. If there is a need to set up an option pool in the future, the dilution portion will also be shared by you two proportionally."

He looked at Chen Fan and asked seriously, "If you feel it's inappropriate, you can mention it now, and I'll make revisions when we get back."

Chen Fan pursed his lips, looked at the two of them, and smiled, "I just opened my mouth and I got half the shares. Isn't that too much?"

The other party contributed their technology as equity, which, when converted into shares, wouldn't exceed 30%. He simply offered a suggestion, did nothing, yet he owns half.

To be honest, if this weren't my own uncle, it would be absolutely impossible.

Furthermore, without them, even if Chen Fan had many ideas, he wouldn't be able to pocket this asset. It would just become public property, like the two cars, and give him a mediocre qualification.

It might not even get the attention of higher authorities, and could very well end up being locked away in a warehouse to gather dust. By the time the news spreads to China and higher authorities remember it, they will find that because it was not registered for an international patent, Cisco has already invented and registered it, resulting in all their efforts being in vain.

There was nothing he could do. Compared to cars, electronic products were indeed not valued much at that time. This was not something Chen Fan could change on his own. Even academicians, who were currently academicians, couldn't do anything about it. What could he do?
After Chen Fan finished speaking, before Zhou Zhengdong could reply, Zhou Yali retorted, "So you really intend to keep things clear even between brothers? That's enough, is there anything else?"

Chen Fan: "Uh, no."

Zhou Zhengdong chuckled and said, "That's settled then. Oh, right, it's not over yet."

Chen Fan's eyes widened. "What else?"

Zhou Yali said irritably, "Profits."

Zhou Zhengdong smiled and nodded, "I've opened a bearer account for you at the New York branch of a Swiss bank. All future dividends will be deposited into this account. I'll give you the account details when you have the opportunity to go to the United States."

As soon as he finished speaking, Zhou Yali whispered to him, "Brother, your novel has sold more than two million copies in North America, and the royalties have exceeded $350 million, all of which have been deposited into your account."

However, you'll need to pay taxes on this money. But the European market is starting up, and since it's a large sum of money, my dad will arrange for someone to handle the tax matters for you. You just need to wait to collect the money.

Chen Fan opened his mouth, thought for a while, and said, "It's a bit of a waste to keep this money in the bank. Why don't you help me invest it?"

During this period, the income tax rate in the United States was frighteningly high. However, investment and consumption could be deducted from the tax-free allowance. So even though Zhou Yali said that Zhou Zhengdong could handle the tax matters, he still did not want to put his money in the bank and have it deducted for no reason.

Investing your money not only avoids taxes but also increases its value. The next 20 years will be the best period for the US economy, with a soaring stock market. Buffett's main wealth growth will occur during this period. With low investment risk and high returns, isn't that much better than keeping money in the bank?

Upon hearing Chen Fan's words, Zhou Zhengdong and the other man exchanged bewildered glances, then looked at Chen Fan with expressions of surprise. "You know about investing?"

Chen Fan sighed helplessly, "I mean, why do you all always think I'm ignorant? I've said it so many times, I can read foreign journals in China, so what's so strange about me understanding investment?"

Zhou Yali chuckled awkwardly, "Hehe, I almost forgot."

Zhou Zhengdong also laughed and said, "It's mainly because of the current domestic environment. Someone like you who knows a little bit about everything is indeed an exceptional case."

Zhou Yali quickly changed the subject, asking, "How do you plan to invest? Stocks, real estate, or something else?"

Chen Fan smiled and didn't say much, but said to Zhou Yali, "Apple computers are pretty good. Help me invest in Apple computer stock."

Zhou Yali: "Uh, but Apple computers haven't been released yet."

Chen Fan gestured a few times and laughed, "You can invest even if it's not listed on the stock exchange, it's just venture capital..."

Before he could speak, Zhou Zhengdong waved his hand and said seriously, "Leave this matter to me. I guarantee I'll exchange them all for Apple stock."

If someone can't even handle this small matter after joining the legal department of the Trade Representative's office, then that Trade Representative is worthless. Just for the sake of the position, major investment banks will have to allocate a portion of their investment share. The only difference is the amount of the share; they certainly won't get nothing at all.

Besides, not everyone can see the future, and people would be more than happy to have someone share the risks.

After a pause, Zhou Zhengdong added, "However, the market is risky, and investment requires caution. If another company surpasses Apple, your investment may be lost."

Chen Fan smiled and nodded, "It's alright. Investing is like playing cards. Once you've placed your bet, you don't regret it whether you win or lose."

Zhou Zhengdong smiled and said, "Okay, that's spirited."

He turned to look at Zhou Yali, "Then let's stick to the old method, using your name as the nominee shareholder?"

Zhou Yali felt that having more debt wasn't a problem, so she said, "Sure."

She then rolled her eyes and looked at Chen Fan, asking, "Brother, besides Apple, are there any other companies you're interested in investing in?"

Chen Fan thought for a moment, "I remember, Wang Laboratories is a publicly listed company, right?"

Zhou Yali turned to look at her father, Zhou Zhengdong, who nodded. "It's a listed company, and a star stock at that. The company's operations have always been good, and the dividends are decent."

Chen Fan smiled and said, "If there's any more income in the future, we can buy some Wang Laboratories stock."

Zhou Zhengdong couldn't help but laugh, "Anyway, you've set your sights on computer stocks."

Chen Fan shrugged and said, "Actually, besides computers, software companies are also good, like Microsoft."

Zhou Zhengdong was somewhat surprised, "You even know about Microsoft?"

Before Chen Fan could speak, he waved his hand and said, "I know, I read it in a journal. Okay, I'll remember it."

There are only three companies in total; it's hard not to remember them.

Chen Fan picked up his teacup, took a sip, and exhaled a long breath.

He did want to buy DOS outright. Bill Gates bought the DOS system for only a few hundred thousand dollars back then. With his current assets, he could buy ten of them at once.

But as I said before, the value of something doesn't depend on the thing itself, but on who owns it.

Bill Gates' mother was a board member of IBM, and only someone with that kind of status could easily secure IBM's orders, which became the foundation for Microsoft's rise.

If it were the Zhou family, well, they might as well have created a new company themselves. So they still have to invest in Microsoft, even if it's just a small fry right now.

(End of this chapter)