A sample of the failure of the electric business

Sina Science and Technology Tracy

"How old are you?" In the face of Sina technology questions, Wu You in the phone that head and not say. As a failure to complete academic entrepreneurship, the wild way to kill the vertical electricity quotient of the new entrepreneur, Wu secluded very afraid of others said he is not reliable, especially in his founder of the food brand delicious music hoslent.com failed, he hopes to find a job.

October 2011, Sina Technology has received a letters from Wu You, content is "an investment tens of millions of dollars of food will be online, to pay attention to the report." Although the investment amount is actually only 2 million yuan, but this Jiangsu Xuzhou own brand food is launched formally on February 3, 2012, main nut roasted seeds and nuts, preserves, candy and so on snack food.

In fact, Wu You is full of excitement to kill into the electrical business of the point of time, is the most cold winter, from the end of 2011, a large number of luxury goods, group buying category, food raw and fresh type of vertical electrical business collapse, as the original brand representatives of all customers also began to rethink the contraction, Wu secluded "delicious music" also failed to escape annihilated.

January 14 this year, Wu secluded Sina Weibo on the active electrical business people Shangxiang sent to letters, declared the good music of the closure, and expressed the desire to find a work with the electrical business will. Shangxiang forwarded this letters and reviews "The experience of the failure of the CEO is most valuable".

So what is the experience and lesson of this company that locates casual foods?

Origin

Wu You Xuzhou, Jiangsu Province in 2008, admitted to the mining engineering, Xuzhou, specializing in mineral processing. But Wu secluded is not a professional study of the people who are interested in the university began with a few students in Xuzhou to do clothing business for small and medium-sized enterprises to do uniforms.

When they launched a brand of their own clothing, find a small workshop for workers, through the local relatives and friends to find customers, at that time business including science and technology park staff uniforms, Xuzhou airport stewardess uniforms and even college students of graduation clothing, the first year this small regiment to make a hundred thousand of, the second year sales reached 2 million yuan, Net profit of more than 500,000 yuan, small local reputation.

Wu secluded junior three, Xuzhou has a businessman to see their entrepreneurial brand, investment 700,000 yuan to propose acquisitions. And such an acquisition actually does not have too many legal procedures, more is the local favor: Wu put the client resources to him, and Wu's team can not do similar business for 10 years.

And Wu started the two students, and did not have too long business plan, they feel that the price is appropriate to sell, and Wu was earning a little "guilty", and even feel that this is a leather company, three people a total of the company sold, two common entrepreneurial students choose to continue reading, but Wu do not want to go to school, and want to do " Bigger thing. "

"I came out of the country and I was so bloated that I was really big and I wanted to do something bigger," he said. "Wu You said.

Because of the growing environment from the Internet very far, Wu secluded contact with the Internet very late, or a friend of his spread to the three or four-line city of the "Thousand Wars" in the financing, just let him start to be interested in E-commerce. Shortly after he sold the clothing company, Xuzhou a paper business businessman Li Tian (a pseudonym) found him, hoping to do leisure food e-commerce.

Li Tian more than 50 years old, paper business in the Bohai Sea Economic zone to do a lot, he did not understand the Internet, is to see the rapid development of electrical business, hope to be able to try. and choose to do food electric business reason is also very simple, Li Tian have relatives in the leisure food business, have a good supply channels, and at that time independent snack food, he thought that the original brand will have the opportunity.

Originally to the electric dealer is interested in Wu secluded quickly was persuaded, he saw Xuzhou quietly sprang up a casual food wind, and judged within two years Xuzhou line will have more and more leisure food brand shop opening, "Offline development is so rapid, online development speed will be faster." ”

So Wu invested before the accumulation of a hundred thousand of Yuan, Li Tian commitment to invest more than 2 million yuan, the two sides under the witness of a common friend simple agreement, began to prepare to do food electrical business. They also formed a team of more than 20 people, including 4 technology, 4 markets, 4 procurement, 2 art, 1 photography, a customer service, a handyman, so started the business.

But then came the disagreement.

First is the pattern. Wu You want to do a snack food commodity brand, and then stationed in the days of the cat and other electrical goods to do distribution, because he felt that the current investment to do vertical electricity business is far from enough. But Li Tian did not agree that he insisted on doing vertical, and that there was no need to go into the cat, "We want to make food in the van."

The result of such a disagreement is that the funds changed to the full investment by Li Tian, Wu secluded is only a technology stake in the end of this "delicious music" snack food brand is still operating in independent mode.

The second difference is the question of the introduction of funds.

"Delicious Music" at the beginning of 2012, put some advertising to promote, in addition to the design of the site with the impact of the picture mode, attracted a lot of users, sales of the highest peak of April 2012, every day can have 200-300 single.

A good start to attract the eyes of VC, some Suzhou venture began to interview, but were Li Tian terminated. "In Li Tian's view, we think we are doing well, why should we let others come in to share the benefits, or because the traditional view is very deep." Wu You recalls that later they reached a consensus: the use of 2 million yuan smashed, smashed into what kind of.

Difficult

Although the first few months of sales are good, but the operation of "delicious music" so that Wu secluded feel more and more laborious.

The first is the acquisition of new users. Peak period of 200-300 per day sales, the impetus is entirely from the Advertising Alliance, when the advertising stop, the increase in user volume will be a sharp slowdown, daily orders are also falling. But on average 100 yuan even more and more high to obtain a new user cost, let Wu secluded feel unbearable.

He counted the accounts: one-month site warehousing, logistics and manpower expenditure is about 70,000 yuan, but the marketing costs over 50,000 yuan, accounting for more than the overall expenditure of 40%.

Second, the original brand supply chain requirements too high. At that time to "delicious music" supply, the largest factory size of more than 3,000 people, the smallest is the family-style small workshop, supply chain standards difficult to unify. At that time, "delicious music" designed a unified food packaging bags, need to be sent to various factories, packaging and then into the Suzhou rented 500 square meters warehouse, the intermediate links are very many, for a particularly small company, the pace is difficult to keep up.

The third is the food safety problem. Last April, Shanghai "to Iraq" leisure food quality continued to be exposed unqualified, but also to "delicious music" has brought negative effects, in particular, the relevant departments require "delicious music" issued a lot of proof, the process is very troublesome, let Wu quiet headache unceasingly, and began to strengthen food safety considerations.

The biggest difficulty, however, remains the divergence of views with Li Tian as investors during the operation.

In Wu secluded view, "delicious music" early operation there are a lot of data is good, such as customer unit price can reach 150 yuan, higher than the peer of 90-120 yuan, the customer for food evaluation is very good, return rate is almost equal to zero. He still wants to be able to brand-oriented, stationed in a number of electric platform distribution, which can save a lot of market, technology and other costs and intermediate links.

Although Wu You many times to Li Tian put forward the above idea, but Li Tian always disagree. At the same time, Li Tian still views the internet in a traditional way. "We thought about Weibo marketing, and even gave Li Tian the experience of registering Weibo, but he felt that Weibo was not a reliable business." I also planned to take him to see Beijing as a friend of the internet, but he did not want to go. "Wu You said.

Even if it is prudent to spend money, 2 million yuan in the end also in the site 10 months after the burn, the cumulative sales are almost 2 million yuan. Wu You that the idea of vertical business is no future, so put forward to stop the site operation.

For Li Tian, accustomed to the return on investment of 1:10, it is difficult to accept the loss of the cost of business, just the agreed 2 million yuan smashed, he also felt that there is no need to continue to do.

At present, "delicious" staff has been dissolved, only a new project to develop the staff of part-time maintenance, orders on the delivery, inventory of goods on the shelves. Such a vigorous electric business start-up project, so quietly submerged in the internet bubble.

Reflection

Wu secluded entrepreneurial story is so, he told the time also constantly mentioned self-reflection, the first point is too young to understand the electrical quotient is not very profound, a lot of details think not meticulous, "only with a momentum and arrayed, it is difficult to do things well." ”

The lack of experience is also reflected in the capital, due to less attention to the capital market, the initial venture capital agreement too casual, easy for future expansion of the scope of the hidden dangers. And because do not understand the knowledge of VC, also not too can understand valuation, cause at that time some VC find Wu You, he and team is difficult to use larger pattern to think.

And in the disagreement with investors, Wu You that they are too paranoid, communication methods and degree is not enough.

On the reflection of the specific electric business undertaking, Wu You summarized as follows:

1 should not just start in the category of the pursuit of all-inclusive, too many categories to make the supply chain more and more heavy, not the initial stage of the game.

2 to do or need large-scale, casual food supply chain requirements are very high, the team is the best people who know capital, but also have knowledge of casual food people.

3 Leisure food or to do the original brand, platform profit margins are very low. As long as the casual food can be personalized, the same can do high prices, can be more expensive than the offline sell.

4 Original brand marketing innovation is very important, such as micro-bo New media resources should be fully utilized.

5 do not have much relationship with the region, some regional supply is the strength, but the talent, market promotion disadvantage is relatively large.

Wu Secluded's electric business start-up project is just a case of the fierce electricity quotient boom in the past, but there are plenty of things to think about, such as the choice of categories, the choice of models, and the pitfalls of small-business start-ups, hoping to inspire entrepreneurs who are interested in continuing to explore in the field of electrical business.