Building a company is a game of cycles
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
Founders of my generation are easily influenced by the startup VC story of the 2010s.
Raise money, burn cash, grab the market, expand, become a unicorn. As if, with enough speed, you could swallow a whole market. Plenty of companies really did come up that way in that era, especially platform companies: lose money first, subsidise first, grab users first, and figure out how to make money later.
So it's easy to fall into an illusion: building a company is a three- or five-year thing. Either you raise, or you explode, or you exit.
But recently something has really sunk in for me. Do you want to run a company for three or five years, or do you genuinely want to run it for the long term?
Because if you want to run it for the long term, you can't only look at growth, and you can't only look at this year's bestseller. There's one thing you absolutely can't ignore:
The business cycle.
Brands that were nearly written off
Because I'm in fashion myself, I've been reading lots of stories about apparel companies lately. What I found is that many brands we think of as impressive today were, at some point, nearly written off by the market.
Mango / MNG is a good example.
Mango used to be very strong, then went through a tough stretch. In 2016, Mango made a loss for the first time, roughly 61 million euros, and it was still losing money in 2017 and 2018. The reasons weren't complicated: expanding too fast, stores too big, supply chain pressure, and products and channels that all needed rethinking.
But look at Mango today: in 2024, revenue reached 3.339 billion euros, with net profit of 219 million euros. It wasn't that it never had a low point. It readjusted after the low point and eventually came back to a healthier place.
Abercrombie & Fitch too.
In the 2000s it was hugely popular in the UK and the US: heavy fragrance inside the stores, male models at the door, a whole brand built on a cool-kids vibe. But later consumers stopped buying into that persona, and management was mired in controversy. In 2009 its sales fell from 3.484 billion dollars to 2.929 billion, and profit was almost wiped out.
Then, in the past few years, A&F came back. It stopped selling the old "if you're not good-looking enough, you don't belong here" feeling and became a more mature, everyday, inclusive clothing brand. In fiscal 2025, its sales reached 5.3 billion dollars, a new record.
Same with Ralph Lauren.
It used to be a very powerful American lifestyle brand, but later there were too many outlets, too many discounts, it was too easy to buy, and the brand got diluted. What a brand fears most isn't that nobody knows you. It's that everybody knows you, but nobody thinks you're worth anything anymore.
What Ralph Lauren did next was simple: cut overexposure, reduce discounts, control channels, and pull the brand back to lifestyle and heritage. In fiscal 2025, Ralph Lauren's revenue reached 7.1 billion dollars, with a gross margin of nearly 69%. In fiscal 2026, revenue broke through 8.1 billion dollars.
That's not an ordinary turnaround. That's winning back pricing power.
Then today I came across Daphne.
Daphne used to be the queen of women's shoes in China. At its peak it had around 6,800 stores and revenue of over 10 billion Hong Kong dollars. But then e-commerce took off, the store network was too heavy, the products aged, and inventory and channels all became burdens. It lost money badly, and its store count was cut from thousands down to just over 200 by 2020.
If you'd only looked at it then, you'd definitely have thought the brand was finished.
But it didn't die. It cut the asset-heavy stores and moved to a lighter model: licensing, e-commerce and online channels. In 2024 its revenue was about 322 million yuan, with profit attributable to shareholders of 106 million yuan.
Of course, Daphne today is no longer the shoe queen with thousands of stores. But it proved one thing: as long as a company isn't truly dead, a brand still has a chance to survive in a different form.
UNIQLO nearly failed overseas too
The most classic case of all is UNIQLO.
Many people today look at UNIQLO and assume it's always had it easy. It hasn't.
UNIQLO opened its first store in Japan in 1984, selling simple, cheap, comfortable clothes. From 1998 to 2001 it exploded on the back of fleece and became Japan's national brand. By 2001 it had more than 500 stores in Japan and operating income of 102.1 billion yen. It was riding high.
But problems came quickly.
In 2002, Fast Retailing's sales fell from 418.6 billion yen to 344.2 billion yen, same-store sales in Japan dropped 28.6%, and operating income was cut in half. The UK was worse. It entered the UK in 2001 and expanded fast, and by 2003 it had to close 16 of its 21 stores, keeping only a few in London.
If you'd looked at UNIQLO back then, you might have said: this Japanese brand has failed overseas.
And today?
In fiscal 2025, Fast Retailing's revenue reached 3.4 trillion yen, with net profit of 433 billion yen, another record. UNIQLO Japan's revenue passed 1 trillion yen for the first time, and UNIQLO International reached 1.91 trillion yen. It has become a truly global clothing company.
Don't leave the table
Whether you're building a company or a brand, it really isn't a one-day thing.
Brands have cycles, and so do companies. Being hot today doesn't mean you'll be hot in ten years; being in a terrible state today doesn't mean you'll never get another chance.
The biggest problem for many brands isn't a bad product. It's being stuck in old success. Channels that used to work become a burden; stores that used to make money become dead weight; a persona that used to work starts to feel cringe; the founder or management who used to be the company's greatest strength can become its ceiling.
Truly great companies aren't the ones that never fall.
Truly great companies are the ones that, after they fall, can take themselves apart and build themselves again.
As a founder, sometimes you really need to be like a cockroach that can't be killed.
You don't need to be at your peak every year, you don't need to chase every trend, and you don't need to jump on whatever is hot. What matters most is finding a need that doesn't change over the long term, and then keep meeting it with new products, new channels, new supply chains and new ways of expressing yourself.
That's how it was for Mango, for A&F, for Ralph Lauren, for Daphne, and above all for UNIQLO.
Building a business isn't a sprint. It's not even a marathon.
It's more like a game of cycles.
Sometimes things go smoothly, sometimes they go terribly. Sometimes you think you're about to go under; sometimes the market thinks you're done too. But as long as you haven't left the table, as long as you're still correcting, still learning and still delivering value, you still have a chance.
And you never know whether the next peak might be the one that's yours.