Two years of Kai-fu Lee Entrepreneurship: The "big hatch" of innovation Workshop

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This reporter Wang gang from Beijing

"I heard that the innovation Workshop is moving again. "An innovative workshop software engineer told The Times reporter that a lot of external projects have recently poured in (non-innovation workshops) and office space has become more crowded."

This has been a remarkable change in innovation workshops this year. At the Techcrunchdisrupt conference on October 31, the CEO of Innovation Factory, Lee Kai-fu, described the change as "the development direction of the investment leading by the former big hatching and small investment model".

Bo, an Internet veteran observer and five-season consulting partner, implied that it meant that Lee and innovation workshops had become more realistic after an initial exploration. "Innovation Factory has a lot of talented people from all walks of life, including Kai-Fu Lee, they bring many resources, and there is no shortage of money, so they have their own ideas and want to make a company is very normal." Of course, this will face many difficulties. ”

After leaving Google China, Kai-Fu Lee, the top professional manager, began his entrepreneurial journey. Kai-Fu Lee itself is undoubtedly a loud brand, so the innovation factory since the birth of the very big attention, which is also mixed with some of its model controversy.

After two years of accumulation, Kai-fu Lee and the pace of innovation factory significantly accelerated, but whether Kai-fu Lee can build a business empire of their own, is still unknown.

Transformation to do VC?

"Incubator" mode to start the innovation workshop to transform to do VC?

Kai-Fu Lee The first time out of the rumor, he said on Weibo, not to reduce the incubator, is to enhance investment. Innovation Workshop will continue to help entrepreneurs, providing investment + recruitment + legal + Finance + Coach full platform features.

Innovation Workshop Since its inception has become the focus of investment and industry, which benefited from the personal appeal of Kai-fu Lee and "angel Investment + all-round hatching" unique mode. In this model, the innovation Workshop is managed by the management in the field of mobile internet to identify ideas and projects, the establishment of multiple incubators to guide small teams to implement projects, and further grow into independent operations of the company. "Dim sum" and "Pea pod" are the typical cases.

The data show that since the establishment of the Innovation factory, more than 3,700 projects have been reviewed over the past two years, and 39 projects and companies have been hatched and the investment amount is over 2. 500 million yuan, the investment enterprise value is close to 3 billion yuan.

In fact, the first fund in the Innovation Factory also has a project to invest in non internal incubation, but Kai-Fu Lee revealed that the proportion of external projects at that time was small, and probably accounted for only 10% of the total. An objective reason was that the funds were limited at the time. Now, the first dollar Fund for innovation workshops has been raised to 1. 800 million U.S. dollars, with Sequoia, IDG as the representative of the top investment institutions and investors are involved. "That's why we took this step," he said. Kai-Fu Lee admits. In addition, innovation workshop another renminbi fund is also nearing completion, is expected to raise 700 million yuan.

"In the near future, innovation workshops will also raise the second largest dollar fund," he said. The exact number and date are not determined. Lee said.

"Some of the recent new projects in the Innovation Factory are basically VC-like, such as Dot and know." Its main business has shifted to seeking external projects, and investment managers are also running around the country, interviewing entrepreneurial teams, no different from VC. "In Bo's view, the transformation of the Innovation Factory began early, its internal hatching project only" dim sum "," Pea pod "and so on a few, more or" wild "project.

However, Kai-Fu Lee on the innovation of the VC road also has a clear positioning, will continue to invest in early companies, and will not because the size of the capital will give up the Angel project. "We are not going to invest very big company, must be early, may be less than one or two people or even nothing, more than 10 people, a little embryonic." I'm not particularly worried about which one will be better, and I would hope that both projects have the same results. Because the criteria we evaluate are the same. ”

The trap of "big hatch"

In fact, the early emphasis on "hatching" in the innovation workshop inevitably brought some trouble to its development. The ever-expanding team's demand for office space, human Resources and legal services, like a snowball, is the most direct pressure on innovative workshops. While the size of dim sum companies have been "driven away", more and more projects are still in the business.

But with the increase in the number of projects in the Innovation Factory, Lee also began to find that the model could not attract the best entrepreneurs to enter.

"Because entrepreneurs don't want a mentor to tell them what they need, they want to have a majority stake in a start-up, hoping they can decide the company's future." Lee said.

So he had to admit at the TechCrunch conference that the "Big hatch Small investment" model was problematic. "Don't say sustainable development, every year is difficult, incubators need to exit time, if no follow-up funds injected will not be able to maintain." Kai-Fu Lee told The Times weekly reporter.

But he also stressed that this does not mean that innovative workshops will have to abandon the "hatching" function in the future. "If the hatch is done well, there will be more investors willing to pay, and more operating capital and management fees, which in turn can expand and enhance the incubator, which is complementary." ”

"Innovation Workshop will be a better incubation venture capital company to meet the dual requirements of incubating entrepreneurial small companies and investing in entrepreneurial projects with experienced and outstanding entrepreneurs." He explained further.

Wang Huihui, founder and spokesman for the innovation workshop, is reluctant to call this transition "transformational". He repeatedly stressed to the times that the innovation Workshop did not change the original hatching and investment model, both important and future or parallel, and investment must have a certain scale to expand.

Kai-Fu Lee's new approach is: the use of innovative workshops over 1 of the raised. 800 million of billions of dollars to invest in entrepreneurs after 6-9 months, when they need the most money, to help move forward.

"Entrepreneurial entrepreneurship projects have a high success rate, but after the project is on the right track, they usually face the difficulties of hiring people and raising money, so we can provide people and money to help them save time and focus on their products." Lee said.

In Bo's view, the early theory of innovation factory is not wrong, it also has a relatively complete talent reserves and good entrepreneurial environment and financial support. "But innovation workshops are concerned about new areas such as mobile Internet, e-commerce and cloud computing, there is not much law to follow, the lack of planning possibilities, more is the need for the market to automatically configure resources, by the entrepreneur's personal preferences and sensitive factors to determine whether a project can survive." He said.

In the outside world, innovative workshops to enhance the investment function or say that the transformation of VC is natural. "If only to do the incubator, take the most risk but can not share the future benefits, constantly diluted after the end is not to earn money, innovation Workshop is not too small, the size of the need to be able to allocate capital effectively." "Some insiders think.

"Super Angels make a lot of money and control a lot of project sources," said Cheng, director of Tencent's technology channel. Innovation Workshop starting from the incubator, squeezed into the Super Angel Club, and then to do VC, take their own good project.

Some people think that the reason why the innovation Workshop anxious transformation is because of Lee Kai-fu "worried."

"The wave of overseas listings by Chinese companies since the end of 2010 has been a little unsettling, but Kai-Fu Lee chose the direction of mobile Internet, but it was still in gestation period." Lin Jun, a former founder and editor-in-chief of Tenkine, believes that innovation workshops are unlikely to produce a burst of spontaneous growth through high quality, high IQ students.

Therefore, he thought that the innovation workshop enhances the investment function to be realistic, "the reputation is the cloud, the key is can have the repayment, has the return to be able to play the game to continue, can play down has the future".

The Battle of the patterns

Although Kai-Fu Lee created a "wealth and only" of the new venture capital model is angel investment and innovative products, a highly scaled venture capital new model. But as a new thing, it always inevitably comes from outside the harsh vision.

Moreover, before the innovation workshop, there were already cases of Secoluce's failure. The Thai Secoluce model is similar to the innovation workshop. During the period 2005-2008, Secoluce used one of its hatchery units to carry out innovative experiments to try to find a breakthrough in the Internet and mobile internet through brainstorming. The experiment ended in failure.

In view of this, some people even think that the business model of innovative workshops is not very suitable for the domestic market environment. From the domestic environment, entrepreneurship and innovation easier to adapt to the Chinese market.

Kai-Fu Lee chose to do the very high risk angel funds, means that the choice of a difficult road, and at the same time to do the incubator, it is even more difficult.

Since 2000, China's venture capital has developed rapidly, but most of the investment institutions have chosen to do short, frequent and fast projects, so they are increasingly inclined to invest later, even IPO (near-listed companies) projects. But the relatively high risk coefficient, the need to support the start-up enterprises are more difficult to obtain support.

"Venture capital projects are always failures and less successful, especially in early projects." And in the field of venture capital Lee and his team is a novice, the lack of experience will affect their investment success rate. And the industry itself is a very long period of return on investment, and their financial pressure may be very large. "Venture capital vertical portal Good investment net founder Hu Cai and The Times weekly reporter said."

In this respect, Hua said, innovation Factory is not like ordinary companies to spend how much this year to make how much money next year, the return to see four or five years or even seven or eight years, the investment of the company to see returns after the listing.

"The exit mechanism of the innovation factory, like other venture capital organizations, is listed or acquired." Of course we will be listed as the main exit. But it took so much effort, we will not withdraw too early, will wait until the last time to exit. Lee said.

"Plagiarism" Workshop?

Innovative factory recruited the original Baidu Wireless core members of Zhang Lei, the original Alibaba Alipay architect Cai, Happy Farm founder Dombinson, such as the composition of the star lineup, so that the outside world to its higher expectations.

"The profit model is doubtful, wool, plagiarism workshop ..." The criticism has not stopped since its high-profile establishment.

"Dim sum" and "pea pods" and other products, although there are bright spots, but not dazzling. There was no exciting star project in the Innovation Workshop; Pea pod "Mobile phone Wizard is only the network Dragon 91 mobile phone helper Software" pirated "; Dim sum "mobile operating system is only a strengthened version of Google's Android system, adding a number of applications to meet the needs of Chinese users ... All sorts of questions ensued.

and innovation Workshop The latest investment in the Knowledge and dot network, but also almost copied the corresponding foreign models Quora and Tumblr, even in the interface also maintain a high degree of consistency.

This has left innovation workshops in a prolonged public relations crisis.

Kai-Fu Lee responded that as a venture capital, innovation Workshop to choose the real potential of the project, these projects may be unprecedented, may be inspired by the existing model.

"Companies like Apple and Google are hard to come by in China, but China also has a lot of successful companies, such as Tencent, who are a very successful company, inspired by American ingenuity to bring together many ideas and innovate through micro-innovation, even though there is a lot of controversy surrounding them.

"Not necessarily revolutionary products, but must meet the needs of Chinese users, we do not intend to repeat the work." "Lee said that the first inventor is often not the last winner." Mosaic invented the browser, but IE was the winner. LexisNexis did a search early, but Google is the winner, focusing on who can make the technology universal at the right time.

In Guo Jianrong, a technology columnist for NetEase, it seems that no backward economy can avoid a new era of micro-creation. Micro-innovation is actually on the basis of plagiarism to make certain changes to adapt to the market and avoid intellectual property disputes. This is actually a process of learning, following and transcending.

[Reporter observation] kai-Fu Lee's "Business Empire" dream

Wang Gang

Generally speaking, Angels have no long-term control over the project. Kai-Fu Lee's character, light money is not his ultimate demand. Investment is not the end of Kai-Fu Lee, his end is a ' business empire '. "The new media, Internet Watcher Wei This understanding of Innovation Workshop transformation."

In that year, despite jobs to retain, Kai-Fu Lee ran to the "Next stop" Microsoft. And from the top of Google's global vice president and CEO of Greater China, he announced the name of the innovation Factory and started his career as an entrepreneur.

At the beginning of the establishment of innovation factory, Kai-Fu Lee in order to reduce operating costs, put down his figure himself to make a lot of basic matters, including hands-on negotiation, to the unimaginable historical minimum price let innovation factory into Tsinghua Science and Technology Park and has 400 square meters of space. And he "frugally", the ticket is booked economy class, travel to the United States when the reservation is 70 dollars a night inn.

For innovation workshops, Lee is undoubtedly a living sign. "No matter which company or project needs business negotiation or financing, it has to be pulled together, and he has a higher success rate, and he is happy to offer such help." "Dim Sum," an in-house employee told The Times reporter.

Regardless of the number of queries, innovation workshops have gradually shown a prototype of a "business empire": Among the 10 companies that hatch, including the mobile operating system "Dim Sum", the Android phone helper software "Pea pod" mobile elf, mobile application statistical analysis tool "Ally", Mobile platform Image processing Solution Provider "Magic Chart Wizard", Web game development "line Cloud", Android App Store "Application Sinks", HTML5 game company "Lei Friend", light blog "dot", social question and answer website "know", social marketing tool "Le ah" and so on.

Moreover, innovation workshops have also speeded up the pace of expansion. September 8 This year, the Shanghai base of Innovation Workshop officially launched, and announced the establishment of the Shanghai Venture Capital Guide Fund, the first time to raise 200 million yuan.

And according to the close to Kai-Fu Lee said, in the innovation factory in Shanghai, before the establishment of the site, Lee has received Chongqing, Nanjing, Hangzhou, Shenzhen and other cities invited, the future Innovation Workshop or will continue to "expand."

In view of the current situation, Kai-fu Lee "business empire" dream may be mainly pinned on the mobile internet. As we all know, mobile Internet "volume" 10 times times the traditional desktop Internet. And Lee has quietly begun to layout, and lei (micro-BO) as well as Baidu, Tencent, Alibaba three giants to seize the mobile internet "bridgehead."

"China's mobile internet is still not up to a large scale because the number of users on the Symbian platform is only 50 million, but by 2012, with the price of Android smartphones falling and smartphone penetration rising, hundreds of millions of new users will be pouring in, Promote the rapid growth of mobile internet. "Kai-Fu Lee judged.

"Dim sum" mobile operating system is an innovative factory used to "resist" Ma Yun-ari mobile phones, lei millet mobile phone "important weapon."

And in E-commerce, innovation workshops are rarely involved. Kai-Fu Lee has revealed that innovation factory did study several luxury items, group buying projects, but ultimately did not invest. He believes that E-commerce needs a strong sourcing capacity and offline basis, this innovation workshop does not have the advantage.

In addition, Kai-Fu Lee, the Internet is not a complete monopoly, entrepreneurs have the opportunity to go beyond.

For example, today no one will think of doing a QQ, but YY is still up. "He thinks the market is three or four or more dimensions, entrepreneurs can always find their place; Entrepreneurs can also focus on what a giant is not particularly concerned about or good at; an entrepreneur can look for a Disrup (paradigm shift) opportunity, something that suddenly changes, for example, in the past, you can't do video. , but youtobe the timing.