How the Internet companies in China are fading

Author: Zhou 祎

The internet has developed in China less than 20 years, the company appeared a lot, leaving not much. In fact, the reasons for the decline of internet companies are many, in the face of a bad business environment, it is a natural disaster, who can not avoid. But, as the saying goes, there are people who lose money in the best years and some in the worst years. So, I think it is irresponsible to attribute the decline of internet companies to external causes.

I am a person, like nothing to think about, and sometimes pondering, these declining internet companies in the end what is common?

I summed it up, let's see if we're right.

The first category, copy the foreign business model.

In the early years, everyone was copying the American model. If eye, hands, in the United States to see the emergence of a new business model, a time lag, immediately brought it back to China, grab the first advantage. But it's not the same now. There's a new website on the U.S. side, and people on our side will soon be able to read about it, and it's in Chinese. Also, including VC will also put some good models introduced to China. China, such as Tencent, Baidu, Sina, Sohu and other giant companies, to solve the survival problem, are closely watching the world's new models to plot development. In the process of imitation, they are also more able to solve some of the problems encountered, such as government public relations. When a small company encounters such a problem, it may not be able to do it anymore. So the chance of copying the American model as a core competency is no longer there, and I think it's a very risky model.

Moreover, the United States Internet development is not the same as China. Although the base of Chinese netizens is huge, but most of them are low-income people, the hundreds of millions of internet users in America are middle class. Two countries have different cultures, backgrounds and business practices. So, if we move the American model to China, we have to change. To tell the truth, now the internet many people have a strong speculative mentality, blindly copy, do not want to explore, the results of the copy came to find not in line with China's national conditions, and finally became acclimatized. This simple imitation, the success rate must be very low. One of the strongest proofs is that the internet giants are triumphantly coming to China with a business model that they have proven successful in the United States, but in the end they are not acclimatized. Therefore, the start-up companies do not dream of a single copy of foreign models can be bigger, you first no money, the second no users, with what big?

The second category, the pattern itself is not a problem, but it has no value to the user.

Five years ago, for example, the SP had a big line. This value-added service through mobile phone charges, is actually a kind of micro-payment. Each user spends five yuan a month to 10 dollars. This is a very good model, but many SP quick success, not to consider how to do a good job, but the user when the lamb, design a variety of fraud traps, many users are "ordered" a lot of services, do not know. Some SP even directly collusion operators from the user account forcibly deducted money. The end result is that the industry has been completely destroyed.

Let me give you an example. For example, like e-mail marketing, is a good thing, there is commercial value, but later many people send spam messages unscrupulous. As a result, the development to the end, users do not look at the marketing email. Today, companies that rely on mail and database marketing are largely gone.

I have always stressed that if you want to make a success, you must pay attention to the value of users, you must put the user value on the company's income above. This has become a rule in the Internet-the people of the world. On the contrary, if the user value is not valued, for the company's momentary commercial interests, the user is not a transitional mining, is to do harm to the interests of users, the end of the user's patience, or will vote with their feet abandoned you.

The third category, does not start from the user, lacks the core product.

For example, purely internet advertising, marketing-oriented companies. I have always believed that the Internet industry in a complete business model, must have products, and the product must be for the user Service, so as to create commercial value. Because you create value only users, on the basis of users, you can build your marketing model. However, I have seen some companies lack market models, do not know how to segment the market, do not have a user model, and do not know what to target the user population.

The fourth category, did not create any products, attempts to rely on resources to achieve success.

At first he said, "I can get some resources and I'll do it." It turned out that such a company would not succeed. For example, some people are apt to say, what one of my relatives is doing, I know what the carrier telecom leader, he can give me what kind of resources. Or what kind of resources I can get from the government when I deal with the government. It sounds like you'll be tempted to enthusiasts that he's working with the government, the operators, the big powers, and maybe earning money.

The lack of such a company is the understanding of the spirit of the Internet, it does not serve the concept of users, so it will not form a user base. Without a solid user base, the more complex the business model is, the more difficult it is to do things. China's successful internet companies, in general, cannot see the success of relying only on government support. The internet is a virtual thing, if not a user-oriented spirit of service, not 7 days a week without straining the work of the spirit of 24 hours, it is difficult to succeed. The most typical example is Green dam, which ignores the interests of users and wants to be forced into everyone's computer by the government's instructions. But the consequences of Green dam are obvious to all of us.

The fifth category, the business model is too complex.

Some business models have products, but they are more complex. This business model is not only to satisfy users, but also to link up and downstream of the industrial chain. It is in the middle, while satisfying the upstream and downstream enterprises, this model can be done.

For example, there are many search sites for urban living communities. First, it wants to persuade the merchant to cooperate with it. But the business is concerned about the number of its users, you more users I would like to cooperate with you. At the same time it also encourages users to go online, the user said, you do not have any business, I come up to find what things? So, they become two-line warfare.

Many people think this model has the possibility of success, but I think the failure rate is quite high, because it has high standards and strict requirements for his business resources and operations. It always has the first chicken or the first egg puzzle. In fact, the real success of the model, are to single line combat. In the end, I may have to take care of a few parties, but in the beginning, we must first be able to solve one side.

For example, the United States Group purchase site, but also urban life, E-commerce, but it does not need to fix the user, only need to deal with the business, because the business discount as long as large enough to provide products and services is real, it will certainly attract a lot of people. So, he didn't have to pay a lot of ads to pull the user over.

The sixth category, is my own understanding, is too early to make money model is not easy to succeed.

From a big point of view, the Internet company just started the model must not see clearly. The reason is very simple, if the pattern is very clear, the Giants have to do, which will give you the opportunity.

If some business models come out with a clear income, there are two scenarios, one is the business model is really good, but the number of imitators, the Giants will also imitate. For example, to help businesses sell electronic discount coupons. Some portal giants don't have much to think about and rush in without hesitation, a pattern that is less likely to succeed. The other is that early earning money makes it easier for the team to have a little rich or Ann, and it's likely to become a miniature bonsai-earning little but not doing much.

On the contrary, some can not see the pattern, like the QQ, search, today's micro-blog, in the people can not see the time to give them the space and opportunity to grow, once they gathered a huge user base, it is easy to establish the opportunity to earn money.