Thinking from the perspective of Pinduoduo surpassing Alibaba in the business war, why is Ethereum unable to compete with Solana this time?

Author: Chen Jian Jason

In fact, the current situation of Ethereum and SOL is very similar to that of Alibaba and Pinduoduo in 2019. Due to work reasons, I have experienced the painful history of Alibaba being surpassed by Pinduoduo, and I have a deep understanding of where Alibaba failed and where Pinduoduo succeeded. I will use these two famous business battles to reflect on the state of Ethereum and SOL.

As the former absolute leader in e-commerce, Alibaba's development process has gone through 1688 wholesale, Taobao bottom-end retail, Juhuasuan group buying, Tmall high-end retail, and Hema local living. The focus of the entire group's development has continuously shifted upwards. The biggest turning point was when Zhang Yong proposed the concept of "new retail for consumption upgrade" and implemented a high-profile strategy. Since then, the basic foundation of 1688 and Taobao has been strategically downgraded by the group, with a comprehensive shift towards high-end retail like Tmall. At that time, we often saw news of Jack Ma inspecting beef in Argentina, purchasing king crabs in Russia, and investigating salmon in Norway, which meant a full embrace of high-end consumers.

Externally, the atmosphere internally was even more detached, with a lot of time spent on abstract and spiritual matters. Executives sat together all day discussing philosophy and socio-economic issues, and mid-level managers, in order to cater to their leaders, would fill their weekly reports with five thousand words, half of which were reflections and insights. The keyword for the entire company at that time was "value," meaning that every task we undertook, every feature we developed, and every requirement we proposed had to argue "what is its value?" Half of the time in a demand review meeting was spent discussing value. It was painful, really painful.

At the same time, a large amount of funding was invested to support scientists who could not generate productivity in the short term, such as DAMO Academy and PingTouGe.

You could understand that Alibaba had ended the most basic "profit-making" Maslow's need as a company, and in the eyes of executives with fat wallets, they were more in pursuit of spiritual social value.

In fact, these strategies were not wrong; Google and Amazon have also gone through this. If you keep focusing on short-term profits, no one will invest in long-term technological input and cultural development. I also recommend watching a TV series called "Silicon Valley," which I have binge-watched twice; it's really great.

But the mistake was that Alibaba's entire atmosphere had already detached from the masses, abandoning the basic foundation of one billion ordinary people, believing that its consumers would all be middle-class people drinking red wine and eating steak in the future.

At this time, Pinduoduo seized a large number of mid-to-low-end consumer markets that Alibaba had willingly given up, stating that "real consumption upgrade is not about letting people in Shanghai drink French red wine, but about allowing people in small counties to use clean toilet paper." Note that this part of the market was not taken by Pinduoduo; it was given away by Alibaba. At that time, the internal network was filled with voices looking down on Pinduoduo. I once posted about why I started using Pinduoduo because it was cheap, and after buying fresh produce, a vendor directly refunded me without any fuss for rotten fruit. This post was ridiculed by colleagues who said, "What's so great about Pinduoduo? You're earning Alibaba's salary and spending it on Pinduoduo; you're a traitor."

When we bring Alibaba into Ethereum and SOL into Pinduoduo, can you taste it and find out where the problem lies?

As the king of altcoins and the emperor of meme coins, Ethereum established a huge user base through its ICO in 2017, DeFi in 2019, and NFTs in 2021. Then, the old OGs of Ethereum, who made a lot of money, looked at the various meme games played by SOL with disdain, thinking, "These are all things I played with back in the day."

Once people satisfy their basic needs of eating and making money, they begin to pursue more abstract spiritual matters. Thus, they started to engage in a series of discussions about network states, immortality, privacy, ZK, and other topics that have little to do with ordinary people, but allow them to sit together and philosophize all day.

What impressed me the most was two years ago at Devcon in Montenegro, when Vitalik and a large group of people held a Zuzalu discussion by the lake for two weeks. It was exactly like my department head taking us to a small villa in the mountains of Hangzhou to discuss everyone's value. It was incredible.

They have detached from the masses, brother.

I watched Vitalik's video interview with ETHPanda last week, where he spoke in Chinese for over an hour, which was impressive. However, I was still somewhat disappointed after watching it; it felt like drinking a bellyful of plain water—satisfying but lacking in nutrition. The topics discussed were too abstract.

The early OGs of Ethereum have enjoyed too many benefits, showing no signs of financial thirst. In fact, if anyone expresses a desire to make money, they would be rejected and looked down upon by others. This atmosphere, driven from the top down, has made the entire Ethereum ecosystem's developers very "pure." Yes, this word makes my head hurt. Every time I chat with those "pure" types (some are genuinely so, while others pretend to be pure to mix in), my head aches.

If you have ever applied for a grant from the Ethereum Foundation, you should remember that the application terms clearly state "no funding for any profit-oriented projects."

So, developers in the Ethereum ecosystem are entrepreneurs, while developers in the Sol ecosystem are startups.

After experiencing a near-zero situation, SOL has restructured, and the new team members and investors have no historical or spiritual burdens. They possess a strong desire to make money and are still at the first level of Maslow's needs, which naturally makes their willingness to engage more intense, allowing them to connect with the masses more easily.

I am not against companies growing large and investing resources in abstract matters; I even believe it is necessary. Large companies like Google and Amazon have a social responsibility to lead technological and spiritual development. Just as Ethereum, a public chain worth 300 billion dollars, must take on a leading positive role in the industry, smaller exchanges like Gate that deal with meme coins and zero-value coins face no criticism. However, Binance cannot do this because there are moral expectations for industry leaders.

But the problem lies in that you cannot abandon the bottom for the high-end, nor can you forsake the material for the spiritual. You cannot detach from the masses.

Elon Musk's rockets have nothing to do with ordinary people, but his Tesla is accessible to every consumer.

I also have great respect for those who genuinely contribute to the industry and do not wish for it to be just a big casino. I believe that Ethereum, seeing the current lack of innovation and the repetitive nature of meme coins from years ago, feels helpless. They realize that this infinite loop game is not sustainable, so they want to do something truly leading and groundbreaking. However, these things cannot directly bring value in the short term, and they are stuck here.