Why Intensive Investment Without Strategic Anchors Accelerates Corporate Decline

Nighttime lighting data from China’s innovation and industrial clusters shows that the office building lighting rate in core business districts including Xierqi, Zhongguancun, Future Science City and Nanshan Science and Technology Park has long remained above 27% at 4 a.m. These lights that stay on round the clock reflect intensive investment driven by corporate growth targets, and also reveal the prevalent growth anxiety across the industry.

During the financing boom of China’s fresh e-commerce sector in 2015, the founder of a leading platform publicly pledged to achieve a 10-fold annual growth in GMV, vowing to run naked in public if the target was missed. In 2020, the company entered formal bankruptcy and liquidation proceedings, with all core assets auctioned off. Only abandoned plants and pending-to-destroy operational documents were left in its office. Looking back at its five years of operation: the company poured all resources into price subsidies, expanded to two new cities on average every three months, increased its SKU count by 120% from the initial stage, and expanded its team from 117 employees to a peak of 7,200.

In terms of investment intensity, its operational efforts far exceeded the industry average, yet the company collapsed at an even faster pace. The fundamental reason was that the founding team equated scale expansion with improved risk resilience, and regarded overloaded team operation as a solution to operational problems. Essentially, it fell into the cognitive trap brought by growth anxiety.

The underlying logic of growth anxiety can be broken down into three levels:

Level 1: Dilemma of Performance Posturing Amid Financing Ties

Some founders who have secured financing develop the misconception of acting as a "rented CEO", a stress response triggered by performance clauses in financing bet agreements. To meet the growth requirements set by investors in successive financing rounds, enterprises adjust their business narratives accordingly: they prioritize user volume growth in Series A rounds, emphasize revenue growth in Series B rounds, and deliberately shape stories of ecosystem layout in Series C rounds. Performance commitments for each financing round keep depleting the company’s long-term operational potential. Eventually, the business model becomes like a blown sugar figurine — the faster it expands, the more fragile its structure grows, and even minor market fluctuations may lead to a total collapse.

Level 2: Strategic Inertia Caused by Homogenized Benchmarking

The common practice of benchmarking against peers has fundamental cognitive flaws. Typical mindsets include: "Luckin Coffee completed its IPO in the coffee sector within three years, so we can replicate this model in the tea drink track"; "Pinduoduo boosted market value by tapping low-tier markets, and we will reap equivalent returns by following the same strategy".

Such benchmarking is essentially strategic inertia. Enterprises merely copy the visible operational moves of industry leaders, while ignoring the market entry window, exclusive resource endowments and irreplicable contingent factors behind their success. This kind of unequal comparison is akin to an ordinary athlete blindly copying Liu Xiang’s hurdle techniques, or a novice learner imitating Eileen Gu’s freeskiing training regimes. It only drains internal resources and fails to build genuine core competitiveness.

Level 3: False Organizational Prosperity Spurred by Transmitted Performance Pressure

Growth anxiety is contagious within organizations. Anxiety from senior management passes down to middle managers, giving rise to practices such as data falsification and performance padding. Unrealistic performance targets set by middle managers are further pushed down to frontline teams, resulting in futile operations like fake traffic generation and sheer KPIs chasing. The entire organization slips into a state of "wartime euphoria" — equivalent to taking an "organizational stimulant". While short-term operational metrics surge rapidly, the company’s long-term core competitiveness continues to deteriorate.

The three types of growth anxiety mentioned above are major causes of corporate failure, but this does not mean enterprises should abandon growth entirely. A sound growth strategy needs to follow three core principles:

1. Establish a rational mindset that embraces moderate growth. Enterprises operating in segmented tracks naturally face inherent growth ceilings. Rather than pursuing explosive short-term expansion, they should prioritize the principle that risk resilience outweighs growth speed. In commercial competition, the ultimate safety cushion is not a steep growth curve, but the ability to survive and thrive through industry cycles.
2. Build a multi-dimensional operational health evaluation system. Move beyond evaluation mechanisms centered solely on GMV, DAU and year-on-year growth rate, and incorporate key indicators such as repurchase rate, unit economics (UE) and organizational entropy growth rate. The founder of a consumer brand once set a strict rule: whenever monthly revenue growth exceeds 30%, all marketing investment shall be suspended immediately and a one-week comprehensive review shall be launched, to prevent the team from becoming reliant on blind growth momentum. This restrained attitude toward growth delivers far greater value than standardized growth plans provided by external consulting firms.
3. Incorporate a negative list into the strategic framework. Enterprises must explicitly draw up a list of things they will not do. Without such boundary constraints, a company is already engaged in blind expansion without any strategic anchors.

As a classic line from *The Godfather* goes: "Those who can see the essence of things in half a second are destined to lead completely different lives from those who spend a lifetime failing to understand it." In today’s business landscape, rewards never simply go to the hardest-working players, but to those with sober strategic judgment.