Student Question:
Hello Master Chi. I’ve been running a cattery for two years and it’s been cash-flow negative the entire time. My family keeps urging me to quit. Monthly operating costs — food, supplies, utilities, housing — run over 10,000 RMB. Selling two cats in a month is considered a good month; sometimes I go the entire month without a single sale. Yet the monthly expenses never stop. Lately I’ve been keeping the cattery alive with my day-job income, but even that doesn’t cover the gap. A few days ago I paid rent and bought cat food — 3,000 RMB in food alone, and it only lasts a month. More expenses keep rolling in after that. I’d like to ask Master Chi: what is the true essence of entrepreneurship? How does one build a genuine competitive advantage?
Master Chi’s Response:
First, a word of caution to everyone: don’t blindly start a cattery just because you love cats.
That said, if you have substantial capital behind you, going all-in from the start is the cleanest approach.
When it comes to entrepreneurship, the first step is finding a massive market. Within that market, identify a small niche. Become the dominant player in that niche. Then, from that foundation, keep expanding your dominance — growing into a larger and larger monopoly.
In my view, the concept of a true “blue ocean” hasn’t really existed in the past two years. There are only two realistic scenarios.
The first: the market you’ve carved out is profitable, but it’s nothing more than a small blue pond. The market is already at its ceiling. You’ll find sheer cliffs on every side — you’re trapped inside, with no room for rapid expansion.
The second: you may have genuinely discovered a blue ocean. But if the opportunity is truly good — profitable, large market, fast growth — it won’t stay blue for more than three months, maybe six at most. A flood of competitors will rush in, armed with money and resources, and rapidly turn that blue ocean red.
So real blue oceans simply don’t exist in the market.
It’s either a small blue pond, or a blue ocean that’s only blue for a moment.
Build a monopoly position. Avoid competition as much as possible. The hard reality, though, is that true large-scale monopolies are forged through brutal competition — you cannot avoid it entirely.
What counts as a large enough market? This is the first question every entrepreneur must ask.
Say you want to build a company with annual revenue of one million RMB. How many customers does that require? What sales volume? What margins? The answer varies across industries, so look up the numbers for your specific field. But even if you start small and cut in from a narrow entry point without initially going big — your end destination should still be a large market.
Take New Oriental as an example. They started very small, focused purely on TOEFL preparation. TOEFL alone is a small market. But behind TOEFL and GRE lies the entire English-language education market. And through their advantage in English education, they were eventually able to expand into the full K-12 exam prep space — a truly enormous market.
So when you think about your business and your future, always ask: what is the truly large market and demand that my work ultimately connects to?
The changes worth chasing are the ones that will actually happen within the next one to two years.
You must find leverage.
Once you’ve identified a market, ask yourself: does this market itself give me leverage?
Leverage takes many forms — execution leverage, resource leverage, capital leverage. Because when you’re just starting out, you have limited money and limited people. To grow fast enough, you need a large enough market that lets you become the dominant force. And within that, there must be something massive to borrow power from. Every startup that punches above its weight does so through calculated opportunism — finding a market with spark-to-wildfire potential at exactly the right moment, then igniting it by mobilizing resources from every part of the value chain.
Strategically, entrepreneurship can and should pursue uncertain opportunities. But tactically, you must pursue high certainty.