Let me say a digression first. As we all know, there are two modes of supervision in various countries. One is our highly centralized system. The other is market freedom, such as the United States. In a free market country, you won't see any high-tech industrial policies. But in fact, the United States has not completely liberalized. Obama said three years ago that it is still being implemented and it is very successful, that is, creating backflow. American manufacturing is now desperately returning. As for our national policy, the word "top-level design" is a top-down policy with overall relevance and practical operability and step by step. Top-level design is different from vision. Vision is a very vague word. For example, the golden decade in Silicon Valley is very vague, but the top-level design adds the concept of timetable. We now completely skip the layer of electronic equipment manufacturing and vigorously embrace the "Internet". So what is the official definition of internet plus? It is to apply the internet to every level, to transportation, life, logistics and automobiles. In the end, it is nothing more than moving towards a smart life and a smart city.
But the government's promotion is one thing, and the actual effect is another. Just like Shenzhen's initial positioning was not a high-tech industrial zone, a large number of companies such as Tencent and Huawei came out later, and now it is the base camp of hardware entrepreneurship, which is comparable to Beijing in terms of innovation level and even exceeds a lot in some fields.
Microscopically, the concept of internet plus is more correct than internet thinking, but the disadvantage is that there are only directions and slogans, which is completely opposite to the concept of internet thinking with strategy but lack of direction.
Let's talk about internet thinking first. Many people think that internet thinking may be to rush traffic, make a platform or an ecosystem, and then establish a business model. Then, I thought of countless unprofitable Internet products, and then I said that JD.COM burned a lot of money, and Xiaomi didn't make much money at first. Didi madly sends coupons, Alipay sends red envelopes ... A joke invented by a foreigner goes like this-two brothers drive a truck of watermelons to sell, and the habit of $5 is quickly sold out. Sold out, counted the money, lost. The elder brother said to the younger brother, "Look, I told you to drive a bigger truck!" " "
The most absurd cognition of internet thinking is that business models don't need to think first, but will emerge naturally one day. This attitude is not only passive and one-sided, but also ignores the premise of this possibility-the company has enough funds and time. The success of Google and Facebook is completely a survivor bias. They survived because they appeared in Silicon Valley, during the growth period of the Internet explosion. The objective environment allows them to have sufficient resources and undeveloped market, which can be burned until they find a business model. As for JD.COM, I'm afraid I don't need to introduce the number of bodies accompanying him.
In places with large markets and abundant funds, such as Silicon Valley or Beijing, there is room for survival "regardless of business model". It's like playing Texas. Players with more chips should take more risks and keep calling, because maybe the last card will reverse the victory. But if you are not a VC but an entrepreneur, or if you are in a city with underdeveloped venture capital, then of course you have to count cards. When Uber and Airbnb were born, they didn't have a vast undeveloped market like Google and Facebook, so they put forward an accurate business model from the first day.
Even if the business model is put forward at the beginning, it may not come to the end, and many of them are proved to be illusions in the end. Take the well-known group purchase as an example. Simply put, its business model is to make use of the characteristics of the Internet that are prone to group buying impulses, so that some manufacturers are willing to sell goods and services at reduced prices. Group buying websites are media, which play a two-handed strategy of "pricing by quantity" for manufacturers and "pricing by quantity" for consumers; If this strategy is to succeed, the biggest factor is that manufacturers and consumers must be able to continuously obtain profits (manufacturers) and satisfaction (consumers) from it.
From the manufacturer's point of view. For them, it is natural to want to sell them all without generating inventory. For practitioners in the first-line service industries such as catering and beauty, group buying is a way to really reduce the idleness of personnel. A more extreme example is the airplane. Anyway, the cost of the plane flight is fixed, so it is best not to have idle seats, and so is the movie (in fact, the group purchase of the plane has always been: travel agencies). For these operators, this extreme impulse method must meet the following assumptions in order to maximize the income: 1. The cost will not increase (that is, the production capacity itself is abundant); 2. The quality of goods/services will not decline; 3. Will not crowd out the original customers. These three conditions are easy for sellers to achieve, but it is not easy for service industry to establish these three conditions at the same time.
Suppose a restaurant breaks even, but the boss estimates that 25% of the capacity is still not filled. The staff of the group buying company may convince the operator that if the remaining 25% can be used, even if the price is only half price, it will still earn more than it is now! Therefore, the owner may accept the conditions of group purchase and simply fill the production capacity with meager profits. Unfortunately, although the customer came, it also caused more trouble. First of all, guests can't fill the daily production capacity on average as expected. Usually, I am still very free, and then I suddenly redeemed the group purchase coupons before the deadline, which completely failed to achieve the original purpose. Then, bad reviews began to appear on the Internet, mainly due to poor service quality. As for why the service quality is poor, the main reason may be that the owner overestimated the limit of the service he can provide from the beginning, and on the other hand, it is related to the uneven time for customers to arrive at the store. Finally, the industry will find that after several times of cooperation with group buying, the business is getting more and more depressed, but it is even less profitable and less profitable than before.
Of course, group buying websites and customers must have thought about these things, so they will try their best to make reservations for everyone. When the seats are full, they will ask customers to change the time. However, customers often spend before the deadline, and if they can't digest the orders with a term of usually three or four months within a week or two, there will be a troublesome problem of whether the coupons can delay the deadline. What if there is a restriction on the date of use when booking a group purchase coupon? This will greatly reduce consumers' willingness to buy, and it will also cause the problem that hot dates or weekends should be priced differently. In short, it is almost impossible to guide or limit consumers' spending time at home, which is also the key to whether the industry is willing to continue to cooperate with group buying. Therefore, only a few manufacturers should benefit from it and be willing to cooperate with group buying.
But in theory, diversity is not the main reason why consumers are willing to spend in groups, so why will customers decrease in the long run? This should start from the consumer's idea. Needless to say, the problem of declining quality, the biggest problem is the change of consumer psychology. Pricing is one of the keys to marketing. Whether the price is appropriate basically determines whether consumers will pay the bill. Theoretically, prices are determined by supply and demand, but there are still many exceptions, such as boutique markets or special niche markets. Just as we all know that mineral water is not mineral water at all and the cost is extremely low, but a bottle of water costs more than ten yuan, so everyone still pays the bill. The important reason is that everyone is used to this price. Consumers will not compare the price with mineral water and tap water at home, but with other drinks such as cola or coffee. There are two key points here, the first is habit, and the second is comparison. The psychological mechanism behind them is the anchoring effect of price. In other words, the original group purchase price is low, which will make customers feel cost-effective, so they are happy to buy; However, when customers get used to the group purchase price, the value of these goods/services will drop to this price. Therefore, when there are more and more homogenized goods on the group buying website, customers can get used to their amazing low prices by comparing these homogenized goods; When the surprise is no longer a surprise and the price of goods/services is anchored again, it is not easy for customers to spend impulsively. Therefore, when consumers can't continue to get higher satisfaction from the low-priced goods/services purchased by consumers, this two-pronged business model is bound to decline due to the decline in consumer demand.
So the fundamental problem of group buying is that there is no feasible business model. Even if low prices are valuable to consumers, they can't last forever, because there are not enough consumers to buy them, and the partners who are willing to join the group purchase are doomed to make some manufacturers less competitive. The actual value of the goods/services that these manufacturers are willing to provide will gradually decrease to match the discounted price, regardless of whether the price is intentionally raised from the beginning. Irrationality will not last forever. After consumers lose their passion, the market will naturally return to the original mechanism. Simply put, group buying only gives consumers and manufacturers a shot of stimulant, and then earns profits from the irrational expectations of both sides. As a result, this untenable business model, despite the huge amount of money, has not yet become a successful case of the so-called "Internet thinking".
In the entry of Baidu Encyclopedia, you can see the origin of "Internet thinking": when Li Yanhong gave a speech to a group of traditional business owners, he said, "We entrepreneurs should have Internet thinking in the future. Maybe you are not doing the Internet, but your way of thinking should gradually think in the way of the Internet. " At this time, "Internet thinking" is just an idealized and conceptual slogan declaration, which is still very vague. The real concrete definition of Internet thinking began with Zhou's extensive publicity on various occasions, and these speeches were also compiled into a book called Zhou Internet Methodology. Zhou believes that Internet thinking has four points:
First, the user is supreme. In the Internet economy, as long as you use your products or services, you are God! Many things are not only free, but also of good quality, and people are even welcome to use them at a discount.
Second, experience is king. Only by doing things to the extreme and exceeding expectations is it called experience. For example, someone handed me a mineral water bottle and I drank Maotai. The result was 50 degrees. This is beyond my experience.
Third, free: hardware is also entering the era of free. Hardware is sold at cost, with zero profit, and then makes money by value-added services. Although TV, boxes, watches and other Internet hardware do not make money, they make money through advertising, e-commerce and value-added services.
Fourth, subversive innovation: you have to make things cheap or even free; If you make things very simple, you can impress people. If you experience beyond expectations, you can win users and lay a solid foundation for your success. (This definition is different from the "subversive innovation" proposed by Harvard professor clayton christensen. )
Look carefully, the second article "Experience is king" is applicable to any enterprise, which is not a feature of the Internet, but something that any enterprise should do, and the fourth article overlaps with the second and third articles, so I'm afraid the first and third articles are unique to the real Internet. And the focus of these two points is free (or reverse money), and then rely on value-added services. Four strings together means that when you find the needs of users (such as drinking), you have to create an unexpected experience (Maotai), and then Maotai had better be free and make money with different value-added services (high-end wine bottles). There is nothing wrong with this theory itself. The problem is that it has specific premises and does not apply to all situations.
From the above theory, firstly, a contradictory phenomenon will be deduced: suppose I provide a service for free and make money with value-added service B, then why doesn't the next competitor provide A+B service for free and make money with value-added service C? If this cycle continues, how big a truck do you need to drive to finally make money? The essence comes-the premise of launching a service at a loss is that a market must be monopolized. For example, if there are network effects (Facebook), technological advantages (Google), brands (Xiaomi) or economies of scale, competition can be stopped. When the market can be monopolized, seizing the market is the first priority. Monopoly business is impulsive, popular and reasonable, and it is meaningful to sprint at this time. It is difficult for most physical goods to follow this model because of the high unit cost. A calf electric car costs more than 3000 yuan, which is already very cheap, but it is a drop in the bucket in the whole locomotive market, and it is difficult to make up for the loss from other channels. Zhou only dared to imply that TV "doesn't make money", but didn't say it was free. Xiaomi's mobile phone is a prepaid group purchase mode, which can reduce the supply price, but its biggest revenue still comes from selling mobile phones.
Although free is the demand of users, meeting the demand is something that any enterprise should do, but it is not necessarily free to meet the demand. But the most suitable for free is when free helps to improve the experience of products or services, including improving the functional experience or other incentives. For example, Google needs free services to attract the most users, and the information searched by these users will further improve Google's search results, so free services can technically improve Google's services. Free Facebook attracts the most users to register. The more people register, the higher the social value of Facebook, so free Facebook helps to produce the best experience. On the contrary, luxury goods obviously do not apply this premise, because high prices are a kind of value in themselves. Do you want a free LV? B2B service is not suitable for free, because enterprises will doubt free products instead. Slack, an enterprise collaboration service tool, is one of the top startups in the global business field, but it is not free. In fact, the company pays the bill. Slack doesn't let advertisers pay because the company doesn't want information to fall into the hands of advertisers; Secondly, once Slack receives money from advertisers, its products will inevitably tilt towards serving advertisers.
In our country where the industrial revolution has not yet been completed, any new concept seems to shine. If you say to a pancake seller, "You have to think on the Internet" or "It's time for Internet plus", he will probably feel that they are all reasonable, and they all seem to mean the same thing because they are too abstract. The Internet thinking or internet plus in his mind may refer to the launch of a food delivery app or something like that. But if you say, "You have to have Internet thinking, pancakes are free, and there is always a way to make money." He would probably say, "You don't think my pancake stand is big enough?" This narrow Internet thinking is ridiculous.
Paradoxically, in Silicon Valley, the birthplace of the Internet, I have never heard of the concept of "Internet thinking". Because the truth of internet thinking is only market thinking, that is, the market first finds out the demand, and then considers the business model and production cost. In the traditional manufacturing industry, customers are facing foreign countries, so foreign companies bear the responsibility of facing the market. When traditional industries compete for orders, they are used to considering cost before pricing, and at most, considering marketing after developing their own brands. Therefore, the moment Li Yanhong first proposed Internet thinking was a speech to the bosses of a group of traditional enterprises.
Therefore, internet thinking is a reflection on traditional manufacturing thinking, which hangs high in the stage of our manufacturing transformation, just as lean entrepreneurship is a reflection on the internet bubble at the beginning of the century. In Europe and America, the thinking of starting from the market is deeply rooted, and its most valuable industry is no longer manufacturing. So for them, the so-called internet thinking is not revolutionary, which is just like filming Reunion 2. It will never consider the production cost, but only its market, whether it is cinema, product placement, DVD, TV broadcast, surroundings, games, etc. The business model includes online and offline, free charging and other dimensions. This is the thinking of thinking about market demand before designing products and business models.
On the other hand, Internet plus is not suitable for all industries and all links. For some industries, it may only transform some links in their business processes, and may not even bring more profits to traditional enterprises. Some consumer enterprises can transform their business processes, innovate online experience models and integrate offline resources, while traditional manufacturing industries may intelligently transform market means and sales channels through the Internet. Everyone can imagine that the Internet will gradually penetrate into life in the future, making the concept of "Internet" disappear, but this is the future, not the present that happens immediately.
If you really use the spirit of the Internet in traditional industries, don't always think about finding a successful specific medicine in a short time. Not a good APP can save a company, nor a successful business model can sweep the market. The people or teams who succeed in the end are not because they have found a key to success, nor because they have suddenly found a mode of making money, but because they have been trying to correct their mistakes over time, and then adjust their organization and methods of doing things to the essence, accumulating and improving, and finally accumulating amazing power. Connecting with the Internet, the biggest change is to adjust yourself to this fiercely competitive environment, and the speed of change exceeds the speed of competition.
At present, the hype brought by the internet is far more than the actual revolution or innovation, because many start-ups may have cash flow, which brings some foundation to the inflated valuation. However, if this is a bubble, it is not objective. I still remember what I said at the beginning of the article-"top-level design" has always worked, no matter how big or small the effect is, it will always work.
So what should we pay attention to for ordinary entrepreneurs? First of all, is the market right? Keep thinking:
How high is the ceiling of your vertical market?
What about the surrounding market? Is there a competitor that is more horrible than my current competitor?
How strong is the boundary of my vertical market and how long can I play here?
If everyone is competing for the top spot and playing the same game, the best way is to make some money quickly and early. However, if you are one round behind others in the financing round and there is no essential difference between your playing style and others, you should think about what other playing style can make me overtake, or choose to change to a sub-battlefield.
And if the market is right, what can be done to change the style of play?
Look at what more advanced and developed countries are doing. What's the style of play?
Pay attention to the faster-growing opponent's play and understand the pioneer users.
Observe parallel sub-markets, domestic and foreign, first-line and second-line.
If it can be determined that the vertical market is not operating well after trying, it is meaningless to continue to fight, and there are huge problems in future growth, then change the market decisively. If not, restart and reconsider the general direction. As long as there is a rich and executive team, there are still many opportunities for Internet transformation.
Conclusion: Although my writing is gentle as water, as if full of self-confidence, it is not to show myself, but a process of self-knowledge. What is an investment manager? From the perspective of work, an investment manager is a person who looks at the industry, looks for information, visits companies, evaluates the value, finds a team and helps to grow. But I think investors should also be people who can face all kinds of voices rationally and gently. After comprehensive judgment, they still keep an open mind and are ready to admit their mistakes at any time.