Lessons from the first startup
From 1994 to 1998, I studied in the Radio Department of Peking University, which was a purely scientific major. At that time, I liked to write some programs by myself.
My first entrepreneurship was during college. When I was in my senior year, my classmates and I did a simple search engine crawler software and got an investment of USD 50,000 from IDG Capital. After that, we started selling this software in Beijing and Shanghai.
At that time, Chinabyte had just entered China. Since content supervision can only do IT content, the first copy of our software was sold to Chinabyte as a search engine for them. This was my first contact with the Internet. At that time, there was not much demand for this product in the Chinese market, which led to the failure of this venture. Nevertheless, it also gave me a preliminary understanding of what entrepreneurship is.
Later I joined Chinabyte and did software maintenance for them. With the advent of the Internet storm, a few colleagues and I left to create a website-Shawei Sports. At that time, we thought that because many people were rushing to the biggest opportunity-portal websites, the competition for a website in an Internet vertical industry would be less.
First of all, we must be able to get high attention in a short time, because entrepreneurs have only half a year to 9 months to prove themselves. Internet entrepreneurship cannot work slowly and carefully, and cannot prove that its business model is difficult to obtain support from all parties.
At that time, we thought about a few hottest areas: There are already many people in the IT field, social news has greater policy risks, the entertainment industry is not easy to make money, and finally sports. Sports have a strong ability to gain attention. Relatively speaking, policy risks are the lowest. Among the many channels of Sina, the most popular portal site at the time, sports traffic was high and attracted gold owners. So we chose sports as the starting point.
In the process of doing Shawei, we were fortunate to have raised 3 million US dollars. One of the advantages at that time was that the competition was relatively weak. The main competitor was the sports channel of the large portal website, so we quickly became the leader in the field in a single category.
When we were preparing for the second round of financing, everyone in the market was talking about venture capital, and we felt that something was going to go wrong. Shawei didn’t earn a penny, and other portals did not earn much. At that time, many Internet companies carried out large-scale mergers and acquisitions. We believed that the capital market’s tolerance for Internet companies had come to an end, so we finally chose to be acquired.
Qunar why can it be established 6 years after Ctrip was born and can face its threats?
In 2004, Dai Furui, my partner at Shawei, asked me to continue to return to China to start a business, so we started looking for a correct business model.
At that time, the hottest listed company was Google, and from public information, it had a very good business model and very high income. So we thought, can we find the possibility of being a vertical search engine under it.
Google’s number one search field is healthcare and finance, then travel, followed by entertainment and automobiles. Still similar analysis methods, the risk of medical care is very high; finance was highly regulated in China at the time; entertainment looks good, but revenue is not clear; automobile platforms have done a good job on some large portals, and we have too much room for further development. Small-of course, it later proved that our judgment was wrong. Automobiles are now a very promising industry.
Tourism is a very good industry. Internet technology can make a large-scale reconstruction of tourism. At the same time, the huge influence of airline competition ranking in the United States also shows that the aviation industry has the talent to be a vertical search engine. Information and ranking services play a role in the tourism industry. huge.
In the end, we chose the travel industry to establish Qunar. After some hard work, Qunar went public.
Qunar has suffered serious losses since its listing, with a loss of approximately two to three billion yuan in cash each quarter, and its stock price is relatively stable. Many people are puzzled, but after researching, they will find that Amazon lost a lot when it went public, with the highest quarterly cash loss rate reaching 75%.
Why can the capital market accept losses? When your business growth rate and income growth rate can be guaranteed to be above 60%, if you lose money for a period of time, the market is acceptable.
If you can maintain a growth rate of more than 60%, you can double the entire business by 2.5 times in about two years, and by 6-7 times in four years. This proves that if the business scale is always growing at a high speed, your investment It is very effective.
How can I keep myself growing? This is related to the problem of the potential market. Every company needs to think about this question, especially after the company enters the C round, you have to start to define your potential market very clearly.
The company must be a single point of breakthrough in the early stage, opening the market through the initial starting point. But when the company enters the high-growth stage, it is necessary to consider clearly where the end of growth is. After all, growth is not endless.
If your growth rate is already in your potential market, and it is impossible to maintain a growth rate of more than 60% for a long time, your strategy of price war with competitors will seem meaningless.
Qunar, why can it be established 6 years after Ctrip was born and can face its threats? One of the most fundamental reasons is that Ctrip has fundamentally miscalculated its potential market, which is also a common problem existing in many Internet companies today.
At that time, Ctrip had always said that online travel was its potential market, but online travel was a market with an annual growth rate of 40%-50%. When you occupy 50% of the market today, even if the growth rate is very fast, due to the rapid growth of the market every year, the space released will be very large.
If the entire tourism market is defined as a potential market, because the tourism market is resource-constrained: there are only so many hotels, it is impossible to build them overnight at a growth rate of 40%-50%; aviation aircraft seats, shipping power just like this It is impossible to have a 40%-50% growth rate every year; the growth rate of catering is relatively high, but there are only so many people in China who eat up to three meals a day. This potential market is also relatively constant.
Once the company enters the high-growth stage, it must define the potential market as a constant and relatively stable market, not a rapidly changing market.
In a rapidly changing market, if you are No. 1, there are actually huge risks. If the market suddenly accelerates, your business strategy and model may undergo fundamental changes. Keep thinking about whether your current business can maintain a growth rate of 100%, at least 60% or more, in the next three years.
For example, if your market is close to 50% of the market share, it depends on whether it can be profitable. You need to reduce costs and prepare in advance. If you still want to maintain high growth, you need to consider solving some fundamental problems: Are there alternatives, and whether there are basic needs near the market? Only by thinking through these problems can you adopt a matching strategy.
My 9-point business management experience
Where review of these years, I am most proud of is that we establish a management system, summed up in the following nine points:
the first point: brick culture
we believe corporate values and employees’ understanding of corporate culture, entirely from his The direct superiors of, no more than two levels at most, so the team leader played an important role.
Where to go, for the company’s decision-making and superior leadership, any employee has the right to criticize publicly in the group, and the critics can refute it. This kind of public criticism and rebuttal reflects human nature: whether it distorts the facts, asks for credit, and shirks responsibility; whether it can propose a practical plan, or is it exaggerated; whether it is brave to assume responsibility or shirk responsibility; and whether it is responsible for its own results .
This process actually helped the company refine the corporate culture, and at the same time the best and most thoughtful employees were also highlighted through rebuttal. When looking for new managers, we will pay great attention to those who speak publicly in the group, and we will not promote silent managers.
If you want to be promoted, you need to express your opinions and wishes very strongly, and you must also ensure that you can withstand everyone’s arguments.
We hope that everyone in the company is an informed skeptic, and we encourage employees, especially team leaders, to question every policy and achievement: Is this really good? Can’t it really be better?
The second point: public criticism of
our employees are encouraged to disseminate their ideas to the fullest extent, we call it “speak loudly.” There are many mailing groups where you go. If you have ideas about your superiors, you should let more people know.
We encourage public criticism, because the process of public criticism will trigger a lot of speculation, so that everyone can grasp things more clearly, and at the same time give others a warning.
We ask everyone to “don’t ask three questions when you encounter criticism”: don’t ask about motivation, level, and attitude. Where to go, you can criticize as long as it is based on facts. We don’t require everyone to be a language artist. It is impossible to criticize well, but also to make the criticized face.
It is difficult for new employees to adapt to this culture, but it is also a good corporate culture filter. Qunar has a very high turnover rate of new employees, but after one year of work, the turnover rate is below 2%.
The third point: the person setting things
we are very encouraged because people set things. All management models depend entirely on the maximization of individual abilities. We believe that the most important thing for Internet companies is the people themselves. If a person is interested in and exerts his abilities in an environment he is very familiar with, the value he creates is 100 times that of ordinary employees.
Of course, the personnel design is mainly aimed at high-level employees, such as the top 100. Where to go, each team is recruited by the team leader himself, with a strong personal touch. There has never been a subculture in Qunar, because when the company’s highest-level culture is very healthy and strong, any subculture can be eliminated.
The fourth point: A recruits A, B recruits C.
We are very concerned about whether a new employee has the ability to pull the team after they come in. A-level employees often recruit A-level employees because they are friends; B-level employees often recruit C-level employees because he wants to show his management ability.
Being able to recruit excellent employees firstly means that his professionalism is recognized; secondly, it means that he is honest and reliable in his past career, and that only good employees will join him.
Fifth: Modeling Management
management process intelligence agencies need to be strengthened. Through the establishment of a model, all the company’s behaviors and ideas are digitized and presented to managers at all levels in the form of reports.
Where to go there is a clear clock-in system. If the average working time of a team is long, it means that there is a need to increase staff; if the time is short, we will analyze whether the work needs to be re-arranged. Including each department and each product must establish a value model and a quantity model for its own business to track and judge its own behavior.
The sixth point: the annexation of the team
when the company reaches a certain size, there will certainly be disruptive competitors, the most important conclusion: rather than let other people kill themselves, it is better to commit suicide.
In the development process of Qunar, internal team annexation is a very fierce behavior. It is very common for some grassroots employees and an ordinary manager to annex a high-level team. Even the annexed senior business managers are calm, and he can go to a new position to realize his own value.
Seventh: controllable innovation
we are very concerned about the build process and focus on the core point of the company’s development. But there is an interruption between the process and the process, allowing for innovative practices. The problem with innovation is that the output is often unstable, so we design process control in key positions. After innovation, the output must be stable and meet standards.
Once the innovation is successful, a new key position will be formed, and by monitoring the activity of the process to determine whether the process needs improvement or abandonment. If it is a process network, it will solidify the process and hinder innovation. We are more concerned about the control of input and output links.
We encourage excellent employees to skip the process appropriately. Jumping the process often results in better results than the process. If you always follow the process, it means losing innovation.
We will spend a lot of time analyzing and judging the situation of skipping process and abnormal process. In fact, this process can discover some top talents.
Eighth: conflict management
to encourage corporate culture where healthy conflict, which often allows problems early exposed, to find the essence of the conflict triggered by analyzing the problem, but also good compromise later found in nature.
In many cases, the problem cannot be solved overnight. It requires tactical abandonment, and the ability to continuously compromise, I think, is the competitiveness of the entire company.
A company is a representative of individuals. The top 10-20 people in a company, their intelligence and ability to compromise actually represent the company’s capabilities.
Ninth point: Informed pessimism
American students from an early age to write papers, one of the very important task is to check the facts, to indicate the source of reference content. We are very lacking in this point. Many people have no factual source for their speeches. If the initial facts are wrong, then the results of the discussion, including all discussions in the process, and even the final decision are wrong.
Therefore, when communicating, you should pay close attention to your initial output and check the facts, and at the same time you must check the facts when receiving information.
Secondly, only by quickly abstracting and modeling one thing can the operation efficiency of the entire company be improved. Value judgments are made on things based on the model, and the order of affairs is determined according to the priority of the value.
First of all, we must know, and then we must doubt. The most terrible thing is to remain blindly optimistic about things. According to my observations, people who predict more risks and are more pessimistic about the future have a greater chance of getting things done.