The philosophy of Wang in the blue flood season: sticking to what others don't do in a crisis

as the first MII licensed CDN service provider in 2000, ChinaCache has more than 17,000 servers worldwide, with more than 120 large and medium cities worldwide, providing basic network application services for tens of thousands of well-known enterprises at home and abroad. and Wang still remembers that one of Intel's investors had come to visit his company when the Blue Flood was just created. After a long walk in a small company, they sit at their desks face-to-face, and the investor disdains to say: "You do this job is not very reliable, this thing should be done by telecom operators, you do not." "Three or four years later, probably in 2004, or this investor, again on behalf of Intel back to the blue flood, he changed his attitude, said:" This time to China, did not expect you to become China's largest. ”

The blue Flood was the first Chinese concept unit to hit Wall Street in 2010, when its share price reached around $30 trillion and fell to around 11 dollars in less than a year.

Wang sat in his office, listening to the gurgling sound of bonsai, looking at the ups and downs of stock price movements on the computer screen, sipping a sip of tea and saying, "Now I'm used to this kind of ups and downs." ”

Before and after 2000, Wang and blue flood experienced a difficult time together. At that time, the network bubble was blown up, most of the internet company's profit model is still in the groping stage. Many websites rely on the CDN technology of the Blue flood, but it is difficult to get the money to pay for the blue flood. Wang clearly remember, Sina is the first customer of the Blue flood CDN business, because the business model is not clear, did not make any money. So, after a long time in arrears, Sina decided to put its own advertising directors to the Blue Flood. "At that time, there was no internet company that could make money, and it was a big challenge for us to face bubbles." ”

After 2000 years of bubble is not enough. 2008 again suffered a financial crisis. "A lot of Internet video website financing can't keep up, it's close." Wang said that at that time, almost all video sites in the country were my clients. Many video sites have to take shares as collateral to ease their debt, "at the most, the outside owe US 50 million or 60 million." ”

Now, despite the bubble era of more than 10 years ago and the financial crisis of a few years ago, the blue flood can still survive and grow, in the crisis and bubble Wang and the blue flood in the end is how to come? What does the crisis and the bubble bring? In the face of the future of the industry, what is the vision? Listening to the sound of gurgling water, sipping light tea, Wang received an interview with the "Entrepreneurial State" reporter.

"Entrepreneurial State": In the 2000 before and after the internet industry appeared a lot of bubbles, the site is not profitable, how the blue flood is coming?

Wang：

Actually bubble this thing, some people say bubble is a bad phenomenon, some also think is a good phenomenon, the market is always uneven. It might be a bubble for some companies, and for some businesses, it's what he's really looking for.

The 2000 bubble was really scary. At that time, no internet companies to make money, our customers are not paid to pay, I remember Sina is our first customer. At that time, Sina as a network platform of the profit model is not clear, simply did not make money, so put the advertising position to our mortgage. Not only for us, Dell has also been the directors of Sina as a advertising position. At that time, we often received a phone call from the advertising company, you simply sell the Sina ads to me, we sell. We even considered setting up a special advertising agency to do this. But soon, when Sina started making money, the ads were withdrawn.

At that time, of course, and we continue to speak, of course, you find money customers, the Internet is not very lucrative, but I think you will find what? If you have customers who are not making money, you have to deliberately look for customers who will continue to have money for you, and the Internet can actually help you impulse. Also in 2001, 2002 gave us a chance, when we found some business government customers, as well as some multinational companies. These multinationals include Sony, Ericsson and Coca-Cola. Of course these are forced out, the market forces us to find a new customer base. By the time I started to have text messages, I thought it might be said that it was the first time I saw the dawn after the trough. At that time Tom was willing to pay for the first time, because to do text messages, MMS, do those text messages, a lot of information needs to be distributed quickly. So he is willing to spend money to buy application services. Later, like ebay, ebay, Taobao also has a demand for our business. You will find that new developments bring new bubbles and new opportunities.

I remember that in 2001, the century Interconnection got an investment and had already rolled out the business on budget. Unexpectedly, all the investors withdrew their funds. Sheng, who was connected to the century, told me that it felt like dying once. After the bubble, the number of enterprises to do CDN is becoming less. I used to say that because no one was doing CDN again, we had left our family, so we persevered. Our development in the CDN industry is not a bayonet spell, but the others do not do and we do it.

The entrepreneurial

Bang: The experience of the first bubble, in 2008, the face of the financial crisis, the blue flood in response to feel more comfortable?

Wang：

In the 2008, the bubble was mainly from internet video, when potatoes, Youku, beginning at the end of 2008, at the extreme, our total user debt was over 50 million. Some finally said there is no money, the shares to the blue flood. At that time many websites said, financing is not in place. There are some overseas financing, belonging to the overseas structure, the renminbi is not in, so the plan is to put the dollar to the blue flood, and then money to redeem.

The dotcom boom was staggering. We started to have a 50%~60% in this area, and we have 50 million or 60 million of holes to block. Because almost all video sites are our customers, we have to share the impact of many financial crises. After a period of time, I found that we can not put all the money and resources into a certain industry too much. So we began to cut the proportion of business in the Internet video industry. The financial crisis of 2008 was really a big hit, so it took us almost two years to digest it, which is to balance the income of other businesses.

Now, we are allocating our resources evenly to eight types of business, this includes portal sites, government agencies, traditional media, vertical video sites, game sites, community sites, large companies, E-commerce, and so on, we want to ensure that each business in our operations in the proportion of not more than 13%, This way we won't take too much risk in the face of difficulties in an industry. For example, when the Internet video site encountered financing difficulties, the impact on us is very small, because we have this part of the business compressed to less than 10%, this is the crisis to me the greatest inspiration.

"Entrepreneurial State": How did you find your first client?

Wang：

In the 1999, Internet networks were slow. So we bought that satellite system has a very important function, is similar to the function like CDN. It deliver some of the most homely websites by satellite. For example, you customized Yahoo, as long as Yahoo updates, the satellite system for you to broadcast Yahoo to the local computer. At that time Telecom bought this device is useless, we said we use it, we turned it into a service mode to do, so early we sell cache equipment to telecom operators, with earned money to feed us to do the operation of application services, that is, the sideline to raise the main business. What do we do in terms of service? For example, we can give you the content of Sina as soon as possible, because the bandwidth is very narrow at that time, we help the website to deliver the content to each city through the satellite system. Remember the 2000 Sydney Olympic Games, the Chinese team each a gold medal, Sina Network paralysis once, they say afraid of gold. At that time we said we do such a service, we do a CDN service, we put the content to all over the country, not to impact the source site.

"Entrepreneurial State": Now CDN Industry in China is what kind of status quo?

Wang：

At present, China's CDN penetration rate is less than 5%, while the U.S. figure is 30%~40%. Service providers like Blue Flood have a long way to go. Although big companies like Taobao have a tendency to build their own CDN, we are not worried that once a product has a mature model and become an industry, the enterprise will eventually tend to outsource this part of the business. And the blue flood itself is preparing for the future, in the "Mobile internet", "Triple network integration", "E-commerce" and so on in advance to do research. In order to better meet the needs of users.

"Entrepreneurial State": whether the blue flood in the United States to the standard companies, the company is now developing to what extent?

Wang：

Yes, the bigger one is Ackerman. 1998 founded the company, the first customer is Yahoo. 1999 on the market, when the market when the fry very very geothermal. The 2000 was a huge bubble, and Mr Ackermann was not profitable until 2005, at least 5-6 years after Mr Ackermann's listing. So, CDN in the United States 2000 years time has been hot once, because the first round of internet bubbles in the United States, in fact, the biggest bubble is a CDN, then Ackerman stock price of more than 300 yuan, higher than Yahoo.

In the United States, companies like Yahoo and Google will have a bunch of such companies to do downstream industries. For example, Yahoo, a company such a successful, cohesion of many companies painstaking efforts. Supporting the development of the industry is not a single company. Yahoo today again rotten, it just said no future, but it's profitability and its entire supporting capacity, there is no internet company in the country to compare with them, because the United States Internet industry is very strong, to Yahoo to do supporting, supporting the service of a group of companies is very strong, so I feel in China's internet industry is still quite weak.

In China, you will find what we see today, the first round of the Internet peak, we are sure that Sina, Sohu imitation of the model of Yahoo, and then ebay to imitate the mode of ebay. But we didn't see the companies behind. Behind such a big internet market in China, the Internet industry has not had a decent company up until today. Therefore, the development of China's internet industry is not a company, a business, but the common progress of the industry. This requires a more comprehensive industrial subdivision, more professional subdivision of the construction. The task volume of this work is still very big, the opportunity also naturally will be many.

"Entrepreneurial State": After the listing how do you face the ups and downs of stock prices?

Wang：

October 1, 2010 successfully traded on Nasdaq. Stock prices rose as high as 95% on the day of the market, closing as much as $27.15, breaking the record of the company's rise in the US listing since 2007. And now it's only more than 10 dollars. I think it's normal to be high and low. The main two types of investors, such as the so-called long-term investors, and a class of hedge funds are short-term. These two investors are not quite the same, long term investors may be more to see the long-term development of the industry, the real rational investors are not actually accounted for too high. Hedge funds are a short time to fry the new concept, he is basically looking at short-term benefits. So in pricing, hedge funds will quickly raise your price, and these long-term investors will keep your price stable. If you are in this portfolio if you say that too many hedge funds, the risk is too big, suddenly come in, may quickly go, quickly, will be able to fry your share price high, or waiting for him to go, the stock price immediately fell. We have just been listed in the company for half a year, in fact, is still in a very very volatile.

"Entrepreneurial State": What are the changes in the business model of the blue flood season?

Wang：

First want to sell to telecom, want to sell to operators, then according to our business plan, we introduced a satellite system, China satellite made broadband access, Chinese Telecom bought, Guangdong Telecom also bought. That is, we have him in the agency. Sold to Chinese operators. China's operators, for new things, new business, learning is very fast, quickly accepted. But you will find that their market ability is really poor, whether from packaging products or use methods, are not satisfactory. So we expanded our target customers to Internet sites.

"Entrepreneurial State": in the face of the still grim situation, the bubble still exists, and will exist for a long time. What efforts have been made in the blue flood season in addition to subdividing the business?

Wang：

We will continue to work on market segments. There is also an important piece of growth that means mobile Internet, the related business of mobile internet will be more and more high in our business. We will also pay more attention to network television and e-commerce business expansion, especially E-commerce, we found that the bubble in this industry has been getting smaller. In addition to these efforts, we will spend most of our funding on our own cable construction. We have a cable, optical fiber, from Beijing to Hangzhou, 2300 kilometers of cable. Our idea is that because of our high reuse rate, large flow, wide business, so the ultimate cost may be zero, and such cable construction can be for our CDN business to build a large framework. Of course, we will continue to the vast number of our terminal coverage. In the future, we will go beyond the traditional network, to almost all household appliances may become internet terminals. These new directions will help us face the challenges and crises ahead.