Text / Gong Fangyi
And then no new money does not make money like a shared bike, in such a short period of time gathered so much capital. The motorbike announced a $ 600 million grant on June 16. In the past 12 months, MOP has already raised $ 1.1 billion. It's the biggest rival of theo, this week in Dalian held in the summer Davos revealed that a new round of financing "has been close to the completion of" according to Reuters news, the size will be close to Mountbei. Over the past 12 months, ofo has already raised $ 700 million.
The two companies are currently valued at more than $ 2 billion. They are financed after the completion of subsidies like users, free ride to celebrate. We made a calendar according to the free situation in Beijing:
Yesterday in Davos, Dalian, a roundtable forum, the founder of Wu Bai Wei Wei Wei CNBC reporter asked when the profit. She responded with the film "social network" plot.
In the movie, just started Zuckerberg met experienced entrepreneur Sean & middot; Parker (Sean Parker). Zuckerberg was hesitating for advertising, and he feared that Facebook was not cool. Parker encouraged that $ 1 million was not cool and should wait for $ 1 billion later.
David & middot; Finch this not only looks good, but also very consistent with today's Internet business rhetoric: Internet companies should not start thinking about making money, first big to say. This is the truth in general.
However, the "social network" script basically from start to finish are nonsense, this is no exception.
In reality, Zuckerberg took a lot of investment, but he started advertising from the first year of his business. On-line less than a year, Facebook advertising revenue on the "no cool" $ 1 million, and advertising revenue growth rate from 2005 onwards more than the user growth.
To 2012 to Nasdaq when the market, Facebook has been profitable for 3 consecutive years.
Facebook from the first year of business began to advertise. Figure / Slideshare
Facebook to achieve profitability, only took 500 million US dollars of financing, there is no money to melt more money.
Moabe and ofo are not just not profitable, with free riding days more and more, even the income will not be too much. Even the user can also draw a lottery cash.
And they are not isolated exist, drops and Uber each financing tens of billions of dollars, still continue to burn. Takeaway after several rounds of merger, it is said that in a second called "second half" and the stage to continue to burn.
Is what, in less than 20 years, let the Hollywood screenwriter's imagination to replace Zuckerberg's real story, become the reality of Internet business?
Burn bubble blowing this thing, when the Internet company was born when the beginning
Graduated just five years of Internet entrepreneurs to start their own second company, to send cat food, dog food and pet supplies come.
Founder less than six months, his company because of the hot spots, got 50 million US dollars of venture capital, as well as the largest local electricity shares.
Cat food canned light, high transport costs. And the community pet shop is also very dense. But the company's money is easy to sell at less than the cost price and directly from the freight.
In order to be well known, it took about 100 million yuan to buy an expensive ad slot to do the promotion. These efforts were not in vain, and it was successfully listed for 18 months, with a market value of $ 6 billion.
This is not a daytime dream of a Chinese O2O entrepreneur in 2015, a real story by American entrepreneur Greg McLemore, a pet commercial credit.com founded in 1998.
After the listing, pets.com is not going well. According to data released by the earnings report, in January-February 1999, pets.com spent $ 11.8 million on advertising, of which 2 million had their own mascot in the 15-day astronomical ad in the Super Bowl. This time, its income is only $ 619,000.
On November 6, 2000, after a few hours after George W. Bush was elected president, pets.com announced the closure. From the establishment to the listing and then delisting, pets.com spent a total of 26 months.
Pets.com is one of the stars in the US Internet bubble in 2000. Most of the companies that were closed at that time had a similar story: a new idea related to the Internet - to take a few risk investments - money subsidies to do the growth - listing - finished.
Especially electric business related companies. Accounting for 10% of the Nasdaq index weight of the electricity business has become the year the stock price crash. The E-Commerce Times Stock Index fell 82% from the 1999 high of 340 to 61 in 2000.
And pets.com have a company called Kozmo in the same period, promised an hour to send food, DVD, convenience goods and other hourly delivery service, and then expanded to high-value brand-name goods. This business can not live today, let alone people need to be connected to the computer in 2000.
And some more bizarre companies, such as self-help photo printing chain Kinko made a $ 12 per hour Internet service, so that customers sit in the shop online.
March 2000, more than 6,000 companies listed on the Nasdaq, the vast majority of technology companies. They are characterized by a short time to set up, time to market, do not make money. When the Nasdaq index average price-earnings ratio reached 175 times. This means that the Nasdaq-listed companies to maintain the level of profit that year, investors spend $ 1 each investment, need 175 years to return to this.
Wait until the Internet bubble burst, the stock fell, most companies directly disappeared.
The biggest motivation for blowing bubbles is that the participants can get the money
During the 2000 Internet bubble, the participants did not know that this was a big bubble.
For example, after the listing of Yahoo in 1996, its founder, Yang Zhiyuan quite disturbed. He had recalled, I remember driving home, and then back to the office when I wanted to, and my god, I have done something. & Rsquo; & rdquo;
At that time, Yahoo is doing web index Daquan, that is, after the portal, income from advertising. In 1995, Yahoo received $ 2 million from Sequoia Capital to continue to expand.
If only look at income and profits, Yahoo just listed that bad time. It pre-market advertising revenue of 1.4 million US dollars, but a loss of 643,000 US dollars. On such a performance, Yahoo in the bubble peak, the market value of more than 100 billion US dollars. Although Yahoo has proven a good business after a few years of bubble burst, it was clearly overstated in the late 1990s.
But its investment side Sequoia and Sun Zhengyi probably did not Yang Zhiyuan uneasy. Yahoo listed on the first day, Sequoia hands of the value of shares rose by 8500%.
In the previous 20 years, the average annual rate of return on technology venture capital is 15.4%.
Venture capitalists to push the company after the market can be cash, which is not a lot of companies can get the main reason for the money.
Investment banks that underwrite shares during a listed IPO should have been wary of the company, because it has to determine that the stock will be sold.
But then the market, and Internet-related companies no matter who, as long as the listing will lead to a large number of purchases. With the New York Times, the American family had a pamphlet on the stock, and everyone was talking about B2B business.
So as the listing threshold of the underwriting bank quickly relaxed the listing requirements, such as Credit Suisse gave up the profit requirements, instead of using a company in the 12 months before the listing of at least 10 million US dollars in revenue & rdquo ;, after Even this figure is no longer adhere to.
Put a business to the market, the investment bank can reach a single income of 500 million US dollars.
So despite the investment bank, venture capital institutions aware of the Internet company at the time of the various problems, but in the interests of the drive, they still help start a company to draw a better future, the stock sold to more people, earn commission.
As for the crazy buy after the listing of people, probably do not really think that those companies have a future, but the stock too fast afraid to miss the opportunity.
Over the past few hundred years, each bubble is probably because the participants believe that they can make money before the burst. Who found the law of universal gravitational Newton, had to catch up with the South China Sea bubble.
According to Buffett's master, Benjamin & middot; Graham wrote in the book "Smart Investors", as early as 1720 spring, Isaac & middot; Newton Jazz had a stake in the South China Sea, which was the UK The most popular stock. Feeling the market out of control, the great physicist whispered that he can calculate the celestial movement, but not allowed to people crazy. So Newton sold his South China Sea stock, profit 100%, a total of 7,000 pounds. But just a few months later, Newton reached a deal at a higher price, losing £ 20,000 (equivalent to $ 3 million in 2002-2003). & Rdquo;
China's Internet bubble, probably from the beginning of the Group buy in 2010
US Internet bubble period, China also has its own Internet companies, such as 8848, Netease, Sina and so on.
But there is no profit of the company can not be listed in the A shares, and the SFC listed on the company to the overseas market there are restrictions, so Sina through the VIE structure to the US market, is already in early 2000, the bull market near the end. They did not catch Wall Street's madness.
China's Internet bubble, from the buy began.
Group buy is Groupon invented in 2008, the site with the discount to the user to the restaurant, KTV, cinema and other places consumption, income from these places.
Group buy site is characterized by large amount of transactions, low cost But the United States is still the Internet bubble burst after the recovery period, but also catch up with the financial crisis, capital does not flow to such start-up companies.
But as Groupon gathered to 85 million subscribers in 2010, the valuation reached $ 1.35 billion, and its imitators came out of China like beans.
At that time the most successful pair of competitors, the 2010 set of handles and the United States were set up in the first year to get 60 million and 12 million US dollars financing; the second year rose to 110 million US dollars and 50 million US dollars. These today seem to be accustomed to the numbers that were rare at the time.
Took the financing, a few big Chinese buy companies are prepared to burn hundreds of millions of dollars in advertising.
Handle the net will be a new round of financing 50 million US dollars for the majority of advertising;
Glutinous rice net claims to invest 200 million yuan to advertise;
US Mission Network launched 130 million yuan advertising tender program;
Full network announced 100 million pound advertising;
Volkswagen commented that $ 100 million in financing, there will be 2-3 million yuan for advertising.
According to the China Electronic Commerce Research Center released the "China Group buy industry annual report" shows that the number of Chinese buy site in mid-2011 reached its peak, close to 5200.
The business model of these companies is almost exactly the same: from the catering industry to start by pushing the team to find businesses, negotiate a low-cost package; the same time, in a variety of channels to advertise, to attract users from the site orders, and then buy site and business Divided by agreement.
The handle was holding a similar high loss with the Groupon, high growth prospectus ready to go to the US market. They withdrew their listing applications in 2012, and the company's valuation shrank from $ 1.1 billion to $ 600 million. Listing failed, financing failed to keep up with, directly lead to the handle after the acquisition by the three groups.
2014 China buy site only 176, compared with the peak period, the survival rate of less than 4%. The last is basically the merger of the US group comments, and Baidu acquired glutinous rice.
A big wave O2O came, the brush alone into the new game of subsidies
Buy people from the Internet to the store.
And in 2004 began to pop up O2O is the service from the store pulled home. They use the subsidy to attract users to use the phone a key to call a variety of services.
Beaver home nail allows users to choose a nail technician in the mobile phone application, time, orders, waiting for home to enjoy the nail service, just like the point of sale. In July 2014, IDG A rounded 30 million yuan to the river rapper home.
3 months later, broadband capital, IDG capital B round tens of millions of dollars in financing has arrived, the estimated value of the Beaver home reached 1 billion yuan. From 0 to 1 billion, only half a year.
"VC give me the money enough for me to burn for several years, and what I am anxious to go to expand the scale, occupation of the market, the future nail is a monopoly I want to industry. "Founder of Meng Zhao was so said.
In 2014 the founder of the Kung Fu bear, the beginning of the minimum user only need 66 yuan can be called at home massage service. The price is lower than the store, mainly by cash subsidies. Kung Fu bear set up a year to take 13 million US dollars financing.
According to Preqin, a UK-based consultancy, China's venture capital transactions totaled more than $ 34 billion as of December 2, 2015, doubling from 2014.
2015, "People's Daily" will Kung Fu Xiong called "industry leader" and "rdquo ;.
That year, "People's Daily" also said that other, such as 4000 points is the starting point of the Chinese bull market.
As in July that year, China's stock market as a result of investor confidence and the impact of evaporation of 5 trillion US dollars, Kung Fu bear did not succeed after the financing.
At that time the star company, today basically no sound.
With the subsidy pull the user is too expensive, some O2O companies rely directly on the brush to do the data, such as love is still flowers. According to its own landing the new board when the data released, from January to July 2015, it has 42% of the orders are their own brush.
Figure / Sina Technology
According to Bloomberg data, the size of China's mergers and acquisitions in 2015 soared 80% to $ 515.6 billion, the Internet industry's local transactions grew 4 times, totaling $ 67.4 billion.
Beaver home competitors, toot nail in February 2016 ended, low-cost sold to 58 home. 58 home CEO Chen Xiaohua to accept the "Securities Times" interview revealed that "since last year, a large number of O2O company died." N O O company looking for us to talk about, hope to sell more than 10. & Rdquo;
O2O short time there is a big wave of start-up companies, the United States industry, massage, car wash, send medicine & hellip; as if omnipotent. "Curiosity Daily" a journalist experimented in the summer of 18 days 18 days did not go out to experience the 72 company's services.
A year after only 1/7 access to follow-up financing, other companies are not closed down or transition after the collapse or silence from the user's vision disappeared.
The door to those things, there is still money to continue to burn only a takeaway
From the thousands of regiment survived the United States Mission, the public comment in early 2014 has been on-line take-away channel. US group in this year to attract one billion US dollars investment; public comment is in the Tencent received more than 100 million US dollars investment, and then took some of the money to vote hungry it.
Prior to this, the size of hungry and the size of the Chinese takeaway market, it looks not very big: the 2010 on-line mobile phone page ordering service company, until the beginning of 2014 also only 200 employees, Covering the country's 20 key cities, the amount of financing is only millions of dollars.
Until 2014, from the public comments, as well as investors after the investment of 80 million US dollars, hungry into the crazy growth period: through a large-scale push the team, within a year will cover the city expanded to more than 250, covering Business more than 200,000; access to more third-party logistics team, the average daily orders more than 1 million, more than 20 million active users.
By the end of 2015, hungry and Alibaba signed an investment framework agreement, the latter $ 1.25 billion investment. This will be directly hungry to the valuation of $ 4.5 billion.
From the purchase of the various subsidies continued to take away. Hungry and the United States do not do their own food and beverage, frequent financing is to fill the gap in subsidies, this money posted to the business, the user, send a little brother. Open the meal application, & ldquo; online payment of 25 minus 10 yuan & quot ;, & ldquo; first single minus 8 yuan & quot; and other promotions hanging on the home page.
Market research institutions interactive release "August 2015 take-away O2O research report" shows that hungry in February that year to cancel the "full 50 by 15" after the concessions, the user quickly turned to the US team to take advantage of the sale. And when hungry to re-offer concessions, every day in its day that the user has more meals up.
Alone homogenization of money burn competition, it is difficult to retain the consumer to form a sticky. So until today the market only left the US group, hungry and Baidu takeaway, it is said to have burned after the second half "ralph lauren pas cher, but the US group is still to each order under 4 yuan cash red envelope; Each time period gives a different amount of subsidy.
The biggest thing is a taxi
Drop and fast are all set up in 2012. The first year, drops took 20 million US dollars financing, fast took 10 million US dollars. Start just a taxi to mobilize the platform, can only affect each city up to ten thousand brother.
Beginning in 2014, the two business models, the staff structure, the main market is almost exactly the same company, to speed up the financing frequency and amount, trying to rely on subsidies to defeat each other.
As of August 2014, drops and quick subsidies for more than 2.4 billion yuan, some subsidies to the driver, some subsidies to the passengers. Later, according to the early drop of investors Wang Gang recalled, when drops and fast subsidies between the war, Tencent began only to give a week of subsidies, but fast behind Alibaba in order to grab the payment to pay more, both sides Can not stop.
Until February 2015, a drop of a taxi and a quick taxi jointly issued a statement, announced the merger. The first round of the taxi to grab the resources of the end of the war. After 2016 drops of the founder and CEO Cheng Wei recalled the war that "we started to do 400 million budget, did not expect that month spent more than one billion, when the signing of the hand are shaking. "At this time, the two sides get a total of nearly 1.5 billion in financing.
Followed by a second round of subsidy war began to become drops and Uber fight. The core of both sides is to mobilize millions of private car drivers.
New stories attract new investment. Quickly gathered a lot of capital, so that the ability to drop directly with Uber subsidies World War II:
2015. 5 drops of fast E round financing $ 142 million
2015. 7 drops of fast F round financing of $ 3 billion
2016. 2 changed its name to drop the drip line of F-fin financing $ 1 billion
2016. 5 drops of strategic financing of $ 1 billion
2016. 6 drops of strategic financing of $ 1 billion
In 2015 alone, the two companies provide taxi subsidies at a rate of more than $ 1 billion per year. Many of these incentives are paid to the driver.
In the taxi when the climax of the time coerced with a lot of capital easy to enter. His subsidy is more direct, 100% recharge back to the present. According to easy to say later, when this round of 227 days of promotional activities, users a total of 6 billion yuan, easy to get 6 billion yuan, more than a year net profit net music.
But with the drop, fast compared to the size of the easy or too small, there is no way to a huge amount of subsidies to improve market share in a short time.
In August 2016, China issued a statement confirming the acquisition of Uber China, after the acquisition of the valuation of 35 billion US dollars. Plus in April this year, from Softbank, Silver Lake and other institutions to get $ 5.5 billion investment, drop the valuation of more than 40 billion US dollars. Completely monopolize the Chinese taxi market.
The problem is that the drop of $ 40 billion in valuation comes from the expectation of capital to drop the entire transportation industry. In the gradual fall of the Internet under the New Deal restrictions, the drop subversion of the taxi industry's efforts and capital markets have all looked forward to the original bubble.
But drops and fast subsidies, fight, merge, became the template after the venture.
The birth of a large Internet company has become more skilled, but the way have not yet found
And 20 years ago the Internet bubble was a bit different than today's market. At that time the United States only 100 million Internet users, and most of them are using desktop computers online. Today, China has nearly 700 million Internet users, the Internet is not separated from the body of the smart phone.
But the rapid birth of the company's approach is no different. With subsidies to allow as many users as possible to use their own services, expect the amount of users enough to find a way to make money.
From the Group to date 7 years, this method is no change, nothing more than the way and scale of subsidies are different. Buy the main subsidies to users, take-away to subsidize users and the salesman, taxi to subsidize the driver and the user.
There are brutal competition here. The United States experienced a number of bubbles, buy from the group to take away, and now also began a car and bus business, not a coincidence. Companies that can more effectively access and use resources can come to the end.
Ultimately, the largest companies have enough capital, coupled with the lack of differentiation, the final merger will occur.
But the merger, monopoly of a market, the new business is not able to make money, you can afford it before the huge investment?
So far, a taxi, buy, takeaway, sharing the bike have not yet proved to leave the subsidy or a good business.
Over the past seven years, although there is not a new industry to be born to find a way out, but the early growth is more and more skilled.
Buy and O2O each have hundreds of companies get money. To less than 10 taxi and take-away can continue to receive capital support.
And then to share the bike, Mount Matthew 2016 into the summer after the fire in Beijing, after less than two months time, the two largest companies to each have hundreds of millions of dollars of investment, far from throwing other competitors.
Capital locked Top 2 faster, spending less money on other companies.
As for why the two companies, this is probably not a coincidence, after all, can take over the giant now from Baidu, Tencent, Ali into Tencent, Ali two.
For so many years, the new company that has become a sustainable business is not much, but the burn war has ensured the company's ongoing financing, which also provides early investors with the opportunity to sell shares.
As a result, early investment came sooner or later, growing.
But one of the big companies do not fall there, what will happen eventually? Looks not how many people care.
In 2015, Sam & Middot, president of the largest incubator in Silicon Valley, Sam Altman and his good friend Peter & middot; Till came together in China. That year Peter & middot; Till's entrepreneurial Bible "from zero to one" is China's annual bestseller, sold more than 100 million copies.
After returning home, Altman made two tweets on Twitter:
"If the discussion about the technology finally went to & lsquo; we are not in the bubble & rsquo; The bubble is unlikely to happen. Worthy of concern is that everyone is optimistic. & Rdquo;
For example, I stayed in China last week. Is completely a look of technology bubble. Nobody is worried about this. & Rdquo;