Why China SNS dysplasia

Chengyuan | text

Renren and Kaixinwang have all heard news that they will be listed during the year, but these capital-level moves have not been interpreted as good news by people in the industry. Because there are a lot of people think that Renren and Kaixin have become the bright yellow flower. With the further concentration and consolidation of the domestic large-scale Internet platform and the arrival of a new round of capital market bubble, Renren and Kaixin have been given time And the space is not much, if not "shot" may no longer opportunities.

In reviewing the wave of domestic SNS boom in the past five years, there are actually too many questions worth considering. For the time being put on the market, because it involves the capital market, with a lot of VC, PE and IB have a great relationship, let alone talk about changes in the industrial environment, because there is the inevitable logic of the development of the Internet, but also external factors, Team and other internal reasons, this wave of SNS boom in the past 5 years, there are some opportunities to be able to make happy network, Renren and other social products to do more, but the founding team did not grasp them.

This wave of entrepreneurial enthusiasm for the rise of social concept in the United States has become somewhat anticlimactic in its own founding team or in the rush to seek or over-conservative. Perhaps one or both of them will be able to capitalize on the favorable timing of the capital markets in 2011 to seek early listings or to find a way out through takeovers, but that is only the only way to reduce the expected choice and to compromise with capital . Although it is often said that history is history and can not be "if", it may be a little bit of reflection to reflect on history and to analyze the reasons behind the rush of social networking sites to find a way out, and to allow us to see more clearly the basic laws of the Internet industry Child value.

Adventurous and conservative loss of opportunity

The user activity of Renren and Kaixin is significantly less active than that of the Chinese Internet stocks whose capital markets are on the rise. Alexa traffic from the two sites view, Renren and Kaixin PV values ​​have declined over the past year, Kaixin dropped a little more, in the user battle should be said to be at a disadvantage.

Faced with a slowdown in subscriber growth and weak activity, Renren and Kaixin.com have accelerated the pace of businesses directly related to commercial revenue such as data marketing and e-commerce, accelerated their acquisition of advertising and games businesses, etc. Income, and actively preparing for listing, Renren involved in the pace of investment banks than Happy Network a little earlier. According to the revenue figures disclosed to the public, the revenue of both websites in the past year has increased. The parent company of Renren Group, Oak Rubber Group, has reported billions of yuan in advertising revenues in the third quarter of last year, mostly contributed by Renren. Happy Network also revealed that there are more than 10 million monthly advertising revenue, total revenue over the past year may be 200 million to 300 million yuan.

However, commercial efforts will not make up for the user value growth slowed down and inherent problems. With Renren, not only is there a long way to go from the US model Facebook, but there are some gaps in the expectations of the founding team and investors a year or two ago. Renren is hard to become Facebook, because from the very beginning, the mentality of the founding team was more eager for success.

Chen Renzhou, the parent company of Renren, is the typical entrepreneur of the "fast company" on the Internet in China. From ChinaRen to KongZhong, Chen Zhou has seized two opportunities in the portal era and the SP era, both of which are sold within two years Or listed, and created the fastest in the same industry in the record. But now Chen Zhou himself admits on some occasions that it is hard to start a social network as fast as it was in the past but rather prepare for boil.

However, Chen said "slow" may have to be carefully analyzed. At the business and product level, Renren continued its rapid imitation and follow-up pace in the past two years. It not only quickly launched the 1000 Rubber Edition "Kaixinwang" to deter latecomers, but also introduced glutinous rice earlier this year network. Now "happy net" thing has basically settled in the law, glutinous rice in the face of the momentum of a good start-up company and the menacing "Tencent + GroupOn", the growth curve has slowed down in 2011 to retain the top three, it is worth doubt.

Perhaps Chen Yizhou's "slowness" or "boil" is at the level of his best capital, and capital gains of Sun Zhengyi, which accounts for 40% of the stock, are really what Chen Yizhou needs to endure. In the "Road" level, in fact, Renren can not become Facebook, it is precisely lost in the team did not really focus on the product, failed to Renren as a true communications infrastructure, "surgery" level The eagerness to seek progress and the neglect at the "Taoist" level have made it impossible to build a fast and stable foundation platform that has lost its lofty future.

Once the fierce competition with Renren happy network, it is another extreme problem has caused it now in a hurry to find a way out. Renren is too "aggressive" to do all the quick things, happy network is too "conservative", missed many opportunities. Happy early net innovation, good momentum, seize the craze of the rise of social games, but then "surgery" level began to be conservative, tactically wandering to continue to play games or improve the social functions of the two road choices.

Guo Wei, vice president of Happy Network, has also admitted that engineers and product teams actually have a long history of establishing fast and stable communications infrastructure such as cloud storage. However, the popularity of the game has Great attraction. Afterwards, in fact, to be more courageous to do an open platform, may go beyond the above dilemma and form the result of two non-delays. But in the end, Kaixin lost many opportunities in games and communications due to its openness and the rise of Sina Weibo. In 2011 happy network determined to accelerate opening up, take the initiative to expand more cooperation, finally entered the right path, but the time is indeed too late.

In the capital operation level, happy net is actually a bit slow, happy net was born more than two years, shanghai, sina, tencent, ctrip and many other companies are in contact with explore the possibility of acquisition, the results in addition to the old boss Cheng Binghao Sina Strategic investment, the rest have not been achieved. Happy network may have missed some of the better bargaining period.

The blocked future

Renren and happy network risks in the future not only from their own growth slowed down the inherent problems, but also from the external Internet industry structure and capital market changes. Even in the industry, it looks like this kind of environmental change is like a thunderstorm, overnight, for the world. Environmental changes reflected in two aspects:

First, not only are small companies eager for success, big companies are eager for success, and large companies are even more in the rush of seeking capital. Happy Network took a year to become a social epidemic, the rise of Sina Weibo faster than ever. The "fast company" over the next five years may no longer be the concept of the mid- to-late-stage company of the past, but rather companies with a background in public companies or large institutional investors.

Second, the initiative or the passive is worth mentioning. Platform-based large companies will be more open, open-ended and open to even more than small and medium-sized products companies. Sina microblogging on the 1st anniversary of an open platform to do, Tencent has gradually opened up the core QQ platform, large companies open their core products, the equivalent of opening up the entire domestic Internet market infrastructure, so that the same market, small and medium companies It will be hard to have new room for development.

In the meantime, a new round of bubbles in the capital markets are coming in and the story of how Wall Street is rewarded with high valuations based solely on models and concepts is happening again. NYSE is more like NASDAQ ten years ago, willing to let those not profitable Chinese Internet companies listed. This is bound to result in a wave of capital infighting industry in the domestic Internet industry, the process of tremendous changes, it is reflected in:

First, the era of high valuations. Valuations of new models and concepts tend to calculate business value by the number of users, which naturally leads companies to make every effort and even lose money to compete for users. And growing companies, despite having the VC money to burn, do not May have been listed, with the secondary market financing costs lower conditions of the company.

Second, if money is more than one, it is easy to lay a solid foundation and improve products on a secondary basis while using the means of competition as a major weapon for fighting resources, especially those that throw money and fight traditional resources. Sina Weibo, Tencent Weibo and Sohu Weibo all add users rapidly and have started to cooperate with traditional offline agencies such as radio and television stations and advertise in the outdoor media.

The Logical Capital Forcing of Capital The inevitable result of the quick success of various industries at the industry level is that we will see the domestic Internet market in a more cruel platform competition (ecosystem and value chain competition), entry competition and competition for users in 2011 The war of competition.

To be listed on the spin-off of Sina microblogging as the representative of the listed Internet platform-based enterprises will be as crazy as the Tigers general invasion of the middle ground and throwing money for users, it will mercilessly squeeze, block and outflank those are growing, the number of users About 100 million companies to find their way. Many growing Internet companies will be silently losing their living space under the chaos of giant platform enterprises. Because several major platforms have learned the lessons of the 3Q war and previous years of war of words and salvo, they have successively promoted the person in charge of public relations as the vice president. The public will know even less about the brutal and bloody stories of the inter-company war in 2011.

Bid farewell to "fast" era

The reasons for the current situation of Renren and Kaixin are summarized from the aspect of "surgery" and are eager and over-conservative. From the aspect of "Taoism", they actually ignore or deviate from some basic laws of the Internet world. From a global perspective, with the advent of the social networking era, the Internet industry of the world's major economies has entered an era of great power. Peter Taylor, an angel investor at Facebook, once said that social networking companies are the best investment target for promoting globalization eventually. Capital groups such as MIH and DST have contributed to the proliferation of social networks in emerging economies.

To confirm that the above remarks are as simple as an addition: the world's population reached 7.0 billion in 2010, while Facebook, Tencent, Orkut, etc., as the mainstream social network representatives of different economies in the world (at least not very coincidental between Tencent and Facebook users) More than 1.1 billion users have been aggregated, accounting for just 15% of the world's population. If the denominator is replaced by the major advanced economies plus the 4 billion emerging economies of China, Russia, India and Pakistan, the proportion of people using social networks will exceed 30%.

According to the theory of communication, the worldwide spread of social networks has gone through a leapfrogging phase, which in turn will occupy 40% of the early adopter population; the spread of social networks in developed and emerging economies will soon begin with the early Users enter the post-user stage. In accordance with the current growth rate of Facebook users and the growth rate of the number of Weibo users in China, taking into account the rapid development of mobile social applications in the coming years, most of them coincide with the increase of some new subscribers. In early 2015, The transition of late users should not be a problem.

It is noteworthy that this is a worldwide social network proliferation movement. The impact of this campaign lies in using social relations as the infrastructure, interactive communications and intelligent networks as the infrastructure, and opening up the platform as a diversified commercial operation. The rules of the game will eventually create an online civil community of at least 4 billion people. The pioneers of social networks have started the campaign and monopolized the market in this process, at least in the layout of the desktop Internet platform has been virtually completed. Unfortunately, all latecomers in this area will have a hard time catching up with the size of their forerunner, and big opportunities and "fast companies" may emerge on the mobile Internet.

The essence of social networks is the fast and steady transmission of communication infrastructure for the mass data of all. Companies that already have infrastructure will hardly be able to shake their position in this area, just as the territory has been occupied by the first arrivals, each enclosing its own Kingdom, who later can only bow their heads to do two or three levels of development. It also determines the era of "fast company" in the world of desktop Internet. The vertical and personalized information matching methods represented by Quora and Wavii will rely on the existing Facebook and Twitter users. connect to intensively crafting "slow" information mining can also be compared to the real work of building a neural network.

The irreversible trend, everyone happy network they have lost the opportunity to become a pioneering company, the establishment of the Kingdom's infrastructure companies, no matter how their way out, one of the lessons may be possible in the mobile Internet era to build their own kingdom hero We have a little value.